Multiple Choice
The purpose of the restrictive debt covenant that requires that subsequent borrowing be subordinated to the original loan is to
A) ensure that certain key employees are maintained.
B) ensure a cash shortage does not cause an inability to meet current obligations.
C) protect the lender by maintaining its position in the priority of claims in the event of liquidation.
D) limit the amount of fixed payment obligations.
Correct Answer:
Verified
Correct Answer:
Verified
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