What purpose do covenants serve in a debt agreement

Reference no: EM131317624

1. Comment on the following proposition: Using floating-rate debt eliminates interest rate risk (the risk that interest payment amounts will change in the future) for both the borrower and the lender.

2. What purpose do covenants serve in a debt agreement? What factors should a manager consider when negotiating covenants?

Reference no: EM131317624

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