Typically,the Interest Rate on Corporate Bonds Will Be ________ the More

Multiple Choice

Typically,the interest rate on corporate bonds will be ________ the more restrictions are placed on management through restrictive covenants,because ________.

A) higher; corporate earnings will be limited by the restrictions
B) higher; the bonds will be considered safer by bondholders
C) lower; the bonds will be considered safer by buyers
D) lower; corporate earnings will be higher with more restrictions in place