Which of the following is NOT an example of negative debt covenants?
A) Specifying what activities the business can enter into
B) Restrictions on amalgamation with other companies
C) Supplying creditors with annual audited reports
D) Limiting annual dividend payments to shareholders

Question

Quizplus · Accepted Answer

Supplying creditors with annual audited reports is an example of a positive debt covenant as it ensures transparency and financial stability, which ultimately benefits the creditors. The other options, A, B, and D, are all examples of negative debt covenants as they limit the actions or decisions the business can make.

Which of the Following Is NOT an Example of Negative