- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 2. Corporate Governance Mechanisms
CFA Practice Question
Which of the following tools are most likely used by debt holders to align the company's interest and debt holders?
A. Debt Covenants
B. Equity ownership
C. Compensation
Explanation: Debt covenants are lending agreements between lenders and the borrowing company that are used to align the interest of both parties.
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