Restrictive covenants
A)generally require that firms use debt finance rather than equity finance.
B)generally require that firms use equity finance rather than debt finance.
C)put restrictions on the use of borrowed funds.
D)were outlawed under the Civil Rights Act of 1964.

Question

Quizplus · Accepted Answer

Restrictive covenants are provisions in loan agreements that limit the borrower's actions or require certain actions to be taken. They put restrictions on the use of borrowed funds, such as limiting investments or requiring certain financial ratios to be maintained. They do not require a particular type of financing. The Civil Rights Act of 1964 outlawed discriminatory practices based on race, color, religion, sex, or national origin, but it did not address restrictive covenants.

Restrictive Covenants