Terms of creditors' lending agreements that restrict management's behavior are called:
A)debt covenants
B)comparative terms
C)activity restrictions
D)price earnings terms

Question

Quizplus · Accepted Answer

Debt covenants are terms of lending agreements that restrict management's behavior. They are designed to protect lenders by ensuring that the borrower meets certain financial and operational requirements. Common types of debt covenants include limits on debt levels, capital expenditures, dividends, and other payments to shareholders.

Terms of Creditors' Lending Agreements That Restrict Management's Behavior Are