(bond covenant) an asset coverage test prohibits a firm from issuing additional long-term debt if...
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(bond covenant) an asset coverage test prohibits a firm from issuing additional long-term debt if doing so would reduce the ratio of tangible assets to long-term debt below 1.50 times. A firm currently has $1 billion of tangible assets and $400 million of long-term debt. How much additional long term debt could it issue if it invests the entire proceeds in tangible assets?
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