QUESTION 16

Contractual clauses on long-term debt agreement that place specific operating and financial constraints on the borrowers are called?

Borrower risk constraints

Loan covenants

Payment dates

Loan size

3 points

QUESTION 17

______________ are forecast of what firms expect the income statement and balance sheets look like in a year or two ahead.

Sales volume

Pro-forma financial statements

Inventories

Salaries and Wages

3 points

QUESTION 18

The following types of bonds are unsecured, EXCEPT.

Equipment trust certificates

Debentures

Income bonds

Subordinated debentures.

3 points

QUESTION 19

The assumptions of the sustainable growth model is all of these, EXCEPT.

The only form of equity is common stock, and it will not issue new shares of common stocks next year

The Total assets turnover ratio (S/A) remains constant

Payout a growing fraction of its earnings as dividends.

3 points

QUESTION 20

: _________ is a third party to a bond indenture and can be an individual, a corporation, or, most often, a commercial bank trust department.

Bond issuer

Investor

Trustee

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