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Posts: 201
2 weeks ago
Which of the following statements concerning the use of sinking funds to repurchase a bond issue is NOT true?

▸ The firm makes regular payments into a sinking fund administered by a trustee over the life of the bond.

▸ Bonds can be issued with a sinking fund provision or a call provision, but not both.

▸ The firm can reduce the amount of outstanding debt without affecting the cash flows of the remaining bonds.

▸ Payments from the sinking fund are used to repurchase bonds.
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
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Posts: 200
2 weeks ago
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Bonds can be issued with a sinking fund provision or a call provision, but not both.
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