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:

Explicit Premise

An explicit premise is a statement in an argument that is clearly and directly expressed, providing a basis for a conclusion.

Claim

An assertion, usually unsupported, about something believed to be true by the claimant.

Guidance

Advice or information aimed at resolving a problem or reaching a decision.

Claim

A statement or assertion that something is the case, typically without providing evidence or proof.