Quiz Ch 07 – T/F Sinking Fund Mechanisms in Bond Indentures
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
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.