CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Which of the following is most likely a benefit of debt covenants for the borrower?

A. Reduction in the cost of borrowing
B. Limitations on the company's ability to pay dividends
C. Restrictions on how the borrowed money may be invested
Correct Answer: A

The reduction in the cost of borrowing is a benefit of covenants to the borrower.

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