Which one of the following is not a broad function served by debt covenants? Multiple Choice Debt covenants serve as both signals and triggers, thereby assuring a steady flow of information from borrower to lender. Debt covenants are designed to preserve the borrower's repayment capacity. Debt covenants usually preclude the borrower from being a merger target. Debt covenants offer the lender some protection against credit-damaging events affecting the borrower. A bank's estimated bad debt expense associated with its loan receivables is the: Multiple Choice loan charge offs. O loan loss provision. o allowance for loans. accumulated loan loss