Quiz Ch 07 – T/F Sinking Fund Mechanisms in Bond Indentures

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: Sinking funds are provisions in bond agreements mandating scheduled pre-maturity bond retirements. Companies often buy these bonds on the open market or choose bonds for the call through a trustee-administered lottery, with a purchase price equaling face value if called.

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