Question: a. What is the reason for restrictive covenants in long-term debt indentures? b. What is the reason for provisions regarding? (1) Maintenance of minimum working

a. What is the reason for restrictive covenants in long-term debt indentures?
b. What is the reason for provisions regarding?
(1) Maintenance of minimum working capital (or current ratio)?
(2) Maintenance of minimum shareholders’ equity?
(3) Restrictions on payments?
(4) Power of creditors to elect a majority of the board of directors of the debtor company in the event of default under terms of the loan agreement?

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