When a Bond Indenture Includes a Sinking Fund Provision

question 76

Multiple Choice

When a bond indenture includes a sinking fund provision,

• A)firms must establish a cash fund for future bond redemption.
• B)bondholders always benefit because principal repayment on the scheduled maturity date is guaranteed.
• C)bondholders may lose because their bonds can be repurchased by the corporation at below-market prices.
• D)firms must establish a cash fund for future bond redemption, and bondholders always benefit because principal repayment on the scheduled maturity date is guaranteed.

---

Definitions:

Retainers

Fees paid in advance to a lawyer for legal services, which are then billed against as work is done.

Provincial Law Societies

Legal organizations within specific provinces that regulate the practice of law and maintain professional standards.

Trust Account

A bank account managed by one party for the benefit of another, often used to securely hold client funds in various professions.

Legal Fees

Charges imposed by attorneys for their legal services, which can vary based on the complexity of the legal matter, time spent, and the attorney's experience.