(Topic 9) A company has made all required payments on its revolving credit facility but its debt to tangible net worth ratio violates the facility's covenant. What has occurred?

The correct answer is C. Technical default. See the full explanation below for the reasoning.

Question

(Topic 9)

A company has made all required payments on its revolving credit facility but its debt to tangible net worth ratio violates the facility’s covenant. What has occurred?

Options

ACross default
CTechnical default
DPayment default

How the community answered

(51 responses)

A
10% (5)
C
76% (39)
D
14% (7)

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