If the covenant in Question 30.5 was related to the price of the companys shares, what steps
If the covenant in Question 30.5 was related to the price of the company’s shares, what steps could be taken to raise the price of its shares?
Data From Question 30.5
A manager is responsible for monitoring his employer’s debt covenants. These are linked to the debt to equity ratio, which must not rise above 40 per cent. The manager has noticed that the draft financial statements are showing that this is now at 42 per cent. The manager recommends that the accountants adjust the accruals at the period-end so that this figure drops to 35 per cent. What types of changes could the accountants legally make?
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