What is meant by the term 'negative covenant'?
A) It is the right of a lender to take over the operation of the firm, should an interest payment be missed.
B) It is an undertaking by management never to invest in negative NPV projects.
C) It is a restriction in a loan agreement which limits the actions and rights of the borrower until the debt has been repaid in full.
D) It is a promise made by a borrower to a lender to repay all the debt immediately should profits become negative.
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