Which of the Following Is a Typical Bond Covenant Restriction

Which of the following is a typical bond covenant restriction on dividends and share repurchases?

A) Payouts can be made only once existing debt has been paid.
B) Payouts can be made only if earnings exceed some threshold.
C) Payouts cannot exceed interest payments to existing bondholders.
D) Shares can only be repurchased by issuing new debt.
E) Payouts cannot be made until existing debt is within one year of maturity.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free