A provision in a bond indenture aimed at protecting the interests of bondholders that may restrict the issuing corporation's dividend rate, the taking on of added debt or limit the sale of the company's assets is known as a:

Question

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Restrictive covenants are clauses in bond indentures that impose limitations on the actions of the issuing company to protect the interests of bondholders, such as restricting dividends, additional debt, or the sale of assets.

A Provision in a Bond Indenture Aimed at Protecting the Interests