A covenant that specifies a required minimum level of net worth and working capital is a compliance covenant.
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Q17: It is possible to lower the interest
Q18: Debt covenants help guard against conflicts of
Q19: "Triggers" enable the lender to decide whether
Q20: Contracting parties understand that financial reporting flexibility
Q21: Stock options are the most common short-term
Q23: Although covenant compliance can be jeopardized by
Q24: Management tends to make accounting changes and
Q25: Managerial strategies and decisions clearly affect stock
Q26: Managers wishing to avoid loan covenant violations
Q27: Seizure of collateral is one possible remedy
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