One method of preventing or reducing the chance that corporate management will harm the bondholders to the benefit of the stockholders is to:

Question

Quizplus · Accepted Answer

Writing detailed covenants into bond contracts can help protect bondholders by setting specific requirements and restrictions on management behavior, which can reduce the likelihood of actions that harm bondholders to benefit shareholders. Requiring executives to own stock or bonds may not necessarily prevent them from prioritizing shareholders over bondholders, as their personal financial incentives may still be aligned with maximizing shareholder value rather than ensuring bondholder rights are protected.

One Method of Preventing or Reducing the Chance That Corporate