Suppose a Potential Bondholder Requires an Indenture Agreement to Include

Multiple Choice

Suppose a potential bondholder requires an indenture agreement to include a limit on dividend distributions by the bond's issuer and also a restriction on the sale of the issuer's assets.In this case,the bondholder is most likely concerned about:

A) shareholder claims being diluted.
B) shareholders claiming all of the residual profits of the firm.
C) increasing interest rates.
D) shareholders transferring firm assets to themselves.
E) shareholders earning a higher return on their investment in the firm than the bondholders earn on their debt.