Which of the following statements is CORRECT 3. Most sinking funds require the issuer to...
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Which of the following statements is CORRECT Most sinking funds require the issuer to provide funds to a trustee, who holds the money so that it will be available to pay off bondholders when the bonds matureb. If interest rates increase after a company has issued bonds with a sinking fund, the company will be less likely to buy bonds on the open market to meet its sinking fund obligation and more likely to call them in at the sinking fund call price c A sinking tund provision makes a bond more nsky to investors at the time of issuance.d Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over timee. Sinking tund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond was issued
Which of the following statements is CORRECT Most sinking funds require the issuer to provide funds to a trustee, who holds the money so that it will be available to pay off bondholders when the bonds matureb. If interest rates increase after a company has issued bonds with a sinking fund, the company will be less likely to buy bonds on the open market to meet its sinking fund obligation and more likely to call them in at the sinking fund call price c A sinking tund provision makes a bond more nsky to investors at the time of issuance.d Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over timee. Sinking tund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond was issued
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