oh aren't graham and maureen clever
Of course the property trust they are shareholders in had to purchase the property in the first place. So how did they do that? well, some would be via equity and lot would be via debt.
Of course once they borrow from a bank the do so within an agreement called a covenants
These covenants are usually based on such ratios as debt to equity or gearing.
Of course, Graham and maureen think they are just so smart.
However, property values go up and down in value and if the values drop a lot the trust runs the risk of breaching a covenant.
when that happens, the bank can pull the loan and the trust collapses and shareholders lose everything.
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oh aren't graham and maureen cleverOf course the property trust...
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