Which of the Following Is True Concerning Bond Covenants

Which of the following is true concerning bond covenants?

A) Bond covenants are restrictions placed on bondholders to protect rights of equity holders.
B) Violation of a bond covenant requires that a company declares bankruptcy.
C) If a company violates a bond covenant, it means it has failed to make interest or principal repayments on debt in a timely manner.
D) Bond covenants are legal restrictions placed in order to minimize the risk of default on bonds.

Correct Answer:

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