Homework Answers
A sinking Fund is ;-
Option B - is a special fund the company pays into that accumulates throughout the life of the bond and used to pat the principal amount at maturity. i.e., a account performed by periodically setting aside money that is used for the repayment of bond at its maturity.
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a sinking fund: Select one:
A sinking fund: Select one: O a. is a special fund...
Sinking fund arrangements are least apt to contain which one of these requirements? A. a deferred...
Sinking fund arrangements are least apt to contain which one of these requirements? A. a deferred provision for the first few years B. a one-time repayment of the entire principal and interest at maturity C. a balloon payment D. equal payments of principal over the life of the bond E. sufficient payments over the bonds’ life to retire the entire bond issue
When a sinking fund is used for corporate bonds, the issuing corporation Select one: A. can...
When a sinking fund is used for corporate bonds, the issuing corporation Select one: A. can wait until its bonds reach maturity before setting funds aside for repaying the bonds. B. will be able to convert its bonds into common stock when the bonds reach maturity. C. can choose to redeem its bonds whenever market interest rates decline. D. makes routine installment payments to a fund in advance of retiring the bonds.
A sinking fund Multiple Choice is managed by a trustee. is a claim on assets not...
A sinking fund Multiple Choice is managed by a trustee. is a claim on assets not otherwise pledged as security. is established during a bankruptcy proceeding to repay secured debts. ensures all bonds are repaid prior to the original maturity date. is used solely to retain funds until a bond issue matures.
Sepia Inc. issued bonds for $350,000 that were redeemable in 9 years. They established a sinking...
Sepia Inc. issued bonds for $350,000 that were redeemable in 9 years. They established a sinking fund that was earning 4.49% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposit. $0.00 Round your answer up to the next cent b. Calculate the sinking fund balance at the end of the payment period 12....
A company borrows $160000, which will be paid back to the lender in one payment at the end of 5 years. The company agree...
A company borrows $160000, which will be paid back to the lender in one payment at the end of 5 years. The company agrees to pay semi-annually interest payments at the nominal annual rate of 10% compounded semi-annually. At the same time the company sets up a sinking fund in order to repay the loan at the end of 5 years. The sinking fund pays interest at an annual nominal interest rate of 4% compounded semi-annually. Find the total amount...
Chapter 9 Homework Assignment 1) A written promise to repay a loan principal plus interest at...
Chapter 9 Homework Assignment 1) A written promise to repay a loan principal plus interest at a specific future date is A) a promissory note. B) a line of credit. C) commercial paper. D) a product warranty. E) a returnable deposit. 2) ________ are subject to redemption before maturity at the option of the issuer. A) Debentures B) Mortgage bonds C) Callable bonds D) Sinking fund bonds E) Convertible bonds 3) Convertible bonds are attractive to investors because A) the...
A bond has the following features 10 percent • Coupon rate of interest (paid annually ....
A bond has the following features 10 percent • Coupon rate of interest (paid annually . Principal: $1,000 • Term to maturity: 9 years What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is a percent, what should be the price of this band? Assume that the bond pays interest annually. Use Appendix to answer the question. Round your answer to the nearest dollar and Appen Would you expect the...
Hialurily date. • A bond issuer is said to be in default if it does not...
Hialurily date. • A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture! agreement or if it violates one or more of the issue's restrictive covenants. • A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a sinking fund provision • A bond's call provision gives the issuer the right to...
Please answer the questions DQuestion 13 2 pts The bond indenture may provide that funds for...
Please answer the questions
DQuestion 13 2 pts The bond indenture may provide that funds for the payment of bonds at maturity be accumulated over the life of the issue. The amounts set aside are kept separate from other assets in a special fund called aln Oenterprise fund sinking fund O special assessments fund O general fund D Question 14 2 pts The interest expense recorded on an interest payment date is increased only i the market rate of intenest...
1st blank options = par value, coupon payment, price 2nd blank options = bankruptcy, default, liquidation...
1st blank options = par value, coupon payment, price
2nd blank options = bankruptcy, default, liquidation
3rd blank options = convertible provision, sinking fund
provision, call provision
4th blank options= call provision, call premium,
convertibility provision
5th blank options = floating-rate, fixed-rate
6th blank options = indenture, trustee, debenture
7th = multiple choice
1. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond's_ par...
Sepia Inc. issued bonds for $350,000 that were redeemable in 9 years. They established a sinking fund that was earning 4.49% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposit. $0.00 Round your answer up to the next cent b. Calculate the sinking fund balance at the end of the payment period 12....
A bond has the following features 10 percent • Coupon rate of interest (paid annually . Principal: $1,000 • Term to maturity: 9 years What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is a percent, what should be the price of this band? Assume that the bond pays interest annually. Use Appendix to answer the question. Round your answer to the nearest dollar and Appen Would you expect the...
Hialurily date. • A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture! agreement or if it violates one or more of the issue's restrictive covenants. • A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a sinking fund provision • A bond's call provision gives the issuer the right to...
Please answer the questions
DQuestion 13 2 pts The bond indenture may provide that funds for the payment of bonds at maturity be accumulated over the life of the issue. The amounts set aside are kept separate from other assets in a special fund called aln Oenterprise fund sinking fund O special assessments fund O general fund D Question 14 2 pts The interest expense recorded on an interest payment date is increased only i the market rate of intenest...
1st blank options = par value, coupon payment, price
2nd blank options = bankruptcy, default, liquidation
3rd blank options = convertible provision, sinking fund
provision, call provision
4th blank options= call provision, call premium,
convertibility provision
5th blank options = floating-rate, fixed-rate
6th blank options = indenture, trustee, debenture
7th = multiple choice
1. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond's_ par...
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