The Purpose of Debt Covenants That Ban Borrowers from Entering

Multiple Choice

The purpose of debt covenants that ban borrowers from entering into certain types of leases is to:

A) limit the amount of fixed-interest payments.
B) prevent the firm from supplying too many cars to employees.
C) protect the lender in their claim over pledged assets in the event of failure.
D) protect the shareholders' claims over assets.