A Call Provision, Unlike a Sinking Fund, Allows a Company

question 4

True/False

A call provision, unlike a sinking fund, allows a company to retire its debt early for a specified price.

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Definitions:

Capital Structure

The mix of debt and equity financing used by a company to fund its operations and growth.

Interest Tax Shield

Deducting interest expenses on debt from taxable income leads to a reduction in income tax liability.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which constitute its funding.