CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

Which C would be the most effective way to prevent management from paying large dividends or undertaking stock buybacks well in excess of free cash flow?
A. Capacity
B. Collateral
C. Covenants
Explanation: Strong covenants can protect bondholders from the possibility of management taking such actions to enrich shareholders at the expense of bondholders.

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