Which of the following is not a common restrictive covenant included in bond indentures to reduce risk to the investor?
A)Maintenance of designated thresholds measured by financial ratios
B)Restrictions on future borrowing activities
C)Requirements that the names and addresses of the bondholders be registered with the bond issuer
D)Limitations on the payment of dividends

Question

Quizplus · Accepted Answer

Requirements that the names and addresses of the bondholders be registered with the bond issuer is not a common restrictive covenant included in bond indentures to reduce risk to the investor. The other options (maintenance of designated thresholds measured by financial ratios, restrictions on future borrowing activities, and limitations on the payment of dividends) are common restrictive covenants that are put in place to protect the investor's interests.

Which of the Following Is Not a Common Restrictive Covenant