The purpose of the debt covenant that prohibits borrowers from enterin

The purpose of the debt covenant that prohibits borrowers from entering into certain types of leases is to ________.

A) protect the lender by controlling the risk and marketability of the borrower’s security investments alternatives
B) limit the amount of fixed-payment obligations
C) ensure a cash shortage does not cause an inability to meet current obligations
D) limit the annual cash dividends paid by the firm

ANSWER

B