Some bonds include a sinking fund provision, which usually requires a company to buy back some percentage of the bond issue each year. True False
Added by Julie W.
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A sinking fund provision is a feature in some bond agreements that requires the issuer to set aside money regularly to repay bondholders at maturity or to buy back a portion of the bonds before maturity. Show more…
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The presence of a sinking fund.
Haricharan G.
some bonds have provision which require the issuer to systematically retire a portion of the bond issue each year
Eduard S.
you are considering 2 bonds that will be issued tomorrow. both are rated triple B(BBB) the lowest investment -grade rating, both mature in 20 years. both have a 10% coupon , neither can be called expect for sinking fund purposes, both are offered to you at their 1,000 par value. however bond SFhas a sinking fund while bond NSF does not. under the sinking fund ,the company must call or pay off 5% of the bonds at par each year. the yield curve at the time is upward sloping. the bnd's prices being equal are probably not in equilibrium as bond SF, which has the sinking fund, would generally be expected to have a higher yield tan bond NSF true or false
Nick J.
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