[Solved] The Winnipeg Curling Company Currently Has One Issue of Debt

Question 37
Multiple Choice

The Winnipeg Curling Company currently has one issue of debt outstanding.Winnipeg Curling has decided to borrow more money by issuing new debt with a higher priority in the event of bankruptcy.This could result in a violation of which type of covenant on the original debt?

A)Negative pledge
B)Cross-default clause
C)The new issue will not violate any covenant as there are never covenants when a firm has only one issue of debt
D)This type of transaction is illegal

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