A sinking fund is used by firms to retire some of its outstanding debt every year. Which of the following is a way that a sinking fund may operate?
A sinking fund is used by firms to retire some of its outstanding
debt every year. Which of the following is a way that a sinking fund may operate?
The firm may repurchase the bonds in the open market.
All of these answers
The firm may repurcha se the bonds at the current market price or the call price, whichever is lower.
The firm may buy the bonds at a special call price stipulated in the bond’s sinking fund provision.
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