Which of the following statements is CORRECT?
A) Corporations are taxed more favorably than sole proprietorships.
B) Corporations have unlimited liability.
C) Because of their size, large corporations face fewer regulations than smaller corporations and sole proprietorships.
D) Reducing the threat of corporate takeover increases the likelihood that managers will act in shareholders' interests.
E) Bond covenants are designed to protect bondholders and to reduce potential conflicts between stockholders and bondholders.

Question

Quizplus · Accepted Answer

Bond covenants are agreements within bond contracts that aim to protect bondholders by restricting certain actions of the issuer, thereby reducing conflicts between stockholders and bondholders.

Which of the Following Statements Is CORRECT