Which of the following are negative covenants that might be found in an indentur

Question

Which of the following are negative covenants that might be found in an indenture?
I. The firm must maintain a debt-equity ratio of .55 or less.
II. The firm cannot merge with another firm.
III. The firm cannot pledge any assets to other lenders.
IV. The firm must limit the amount of dividends it pays.

Question 7 options:

I and III only

I, II, and IV only

II, III, and IV only

I, III, and IV only

I, II, III, and IV

I and III only

I, II, and IV only

II, III, and IV only

I, III, and IV only

I, II, III, and IV

Explanation / Answer

Ans

II, III, and IV only .

1 is a positive coventant .

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