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Sundance Inc. borrowed $1,000,000 by selling bonds and had to sign a debt covenant. Which of the following is correct regarding the debt covenant? I.

Sundance Inc. borrowed $1,000,000 by selling bonds and had to sign a debt covenant. Which of the following is correct regarding the debt covenant?

I. A debt covenant may restrict Sundance Inc. from paying dividends.

II. A debt covenant may require Sundance Inc. to maintain a certain minimum working capital.

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