A minimum net working capital of $100 million, net worth in excess of $250 million, minimum interest coverage ratio of 1.75, debt ratio of less than .75, and requirement to provide a financial statement are all examples of:
A) covenants.
B) a prospectus.
C) indenture agreements.
D) special purpose vehicles.

Question

Quizplus · Accepted Answer

These are examples of covenants, which are agreements or promises in a financial contract that the borrower must adhere to. They are often found in the terms of loans or bond issues to protect the interests of lenders or investors by ensuring the borrower maintains a certain financial stability.

A Minimum Net Working Capital of $100 Million, Net Worth