Question: 2 1 Multiple Choice 2 points Why do the issuers of bonds NOT seek to minimize the strength and number of covenants in a bond

21
Multiple Choice
2 points
Why do the issuers of bonds NOT seek to minimize the strength and number of covenants in a bond agreement, if they restrain the firm decisions?
More covenants force the company to renegotiate the terms of the bond if they are broken.
More covenants lower the cost of debt.
More covenants can increase the tax savings of the issuer thus increasing firm value.
More covenants allow the equity holders to pay more dividends.
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2 1 Multiple Choice 2 points Why do the issuers

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