A Sinking Fund Is Useful to a Corporation Because

question 81

Multiple Choice

A sinking fund is useful to a corporation because:

• A) The corporation does not have to worry about paying the bondholders
• B) It provides the corporation with the option to buy the bonds back at the lower of face value or market price
• C) The payments to the sinking fund are not necessary when the firm is in financial difficulty
• D) They are simple and easy to monitor

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Definitions:

Demanders Of Insurance

Individuals or entities that seek to protect themselves against financial losses by buying insurance policies.

Suppliers Of Insurance

Entities that provide various insurance policies to individuals or organizations to protect against potential financial losses or damages.

Expected Value

A calculated average outcome of a random event, considering all possible outcomes and their probabilities.

Car Insurance

A type of insurance that provides financial protection against physical damage or bodily injury from traffic collisions and against liability that could also arise from incidents in a vehicle.