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.
Homework Answers
Correct choice is option D
Explanation: Sinking fund is made to regularly set aside a particular amount in advance of retiring or redemption of bond and this is done so that company does not need to face liquidity problem at the time of retirement because of paying huge amount .
Add Answer to:
When a sinking fund is used for corporate bonds, the issuing
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1- You can distinguish the various types of
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More on types of bonds
1- You can distinguish the various types of
bonds by their terms of the contract, pledge of collateral, and so
on. Identify the type of bond based on each description given in
the table that follows: (Types of Bonds: Junior Mortgage
Bonds/ Debentures/ Subordinate Debentures/ Senior Mortgage
Bonds)
Description
Type of Bond
a) These bonds are collateralized securities with first claims
in the event of bankruptcy.
?
b) These bonds are not backed by any...
Back to Assigrumant Attempts: 2. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is Average: 8 essential For example: . A bonds is generally $1,000 and represents the amount bonrowed from the bond's first purchaser . A bond issuer is said to be in 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...
Please help this is for a grade! Thank you
Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date. The entity that promises to make the interest and maturity payments for a bond issue is called the Based on the information given in the following statement, answer the questions that follow: In July 2009, Hungary successfully issued 1 billion euros...
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