Bondholders often employ a variety of devices-including restrictive covenants in the company's bond indenture agreements-to protect their interests and constrain the actions of shareholders and the firm's managers.
Which of the following are restrictive covenants often used to protect the firm's bond value and bondholder wealth? Check all that apply.

a. Provisions that prohibit the borrower from increasing debt ratios above specified levels.
b. Provisions that disallow the repurchase of stock or paying dividends unless profits and retained earnings are above specified amounts.
c. Provisions that prohibit reducing the firm's liquidity ratio below specified levels.
d. Provisions that require issuing new debt securities whenever interest rates drop below 5%

In addition, potential bondholders may require a_______interest rate on the firm's soon-to-be-issued bond as compensation for the risks that cannot be adeauately protected against using the restrictive covenants

Agreement holders frequently operate a variety of devices, including prohibitive agreements in the company's bond contractor deals- to preserve their interests as well as necessitate the movements of shareholders also the firm's handlers. The following those are prohibitive covenants frequently used to preserve the firm's bond value as well as bondholder wealth are as follows:

* Provisions that prevent the borrower from rising debt rates beyond defined levels.

* Provisions that deny the repurchase of stock either giving dividends except for profits, as well as retained incomes, are above-defined values.

* Provisions that prevent decreasing the firm's liquidity rate below defined values.

So, options (a), (b) and (c) will meet the question's demand.

In extension, the potential bondholders may need a higher interest charge on the firm's quickly to be assigned bond as consideration for the risks that cannot remain sufficiently preserved against using the prohibitive agreements. Many bonds give a fixed interest price, if interest rates in general decline, the bond's interest charges display more engaging, then people will bid up the value of the agreement.