Which one of the following is not a broad function served by debt covenants?
A) Debt covenants usually preclude the borrower from being a merger target.
B) Debt covenants serve as both signals and triggers,thereby assuring a steady flow of information from borrower to lender.
C) Debt covenants are designed to preserve the borrower's repayment capacity.
D) Debt covenants offer the lender some protection against credit-damaging events affecting the borrower.
Correct Answer:
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