Sinking Funds Are Provisions Included in Bond Indentures That Require

question 43

True/False

Sinking funds are provisions included in bond indentures that require companies to retire bonds on a scheduled basis prior to their final maturity.Many indentures allow the company to acquire bonds for sinking fund purposes by either (1)purchasing bonds on the open market at the going market price or (2)selecting the bonds to be called by a lottery administered by the trustee,in which case the price paid is the bond's face value.

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Definitions:

Internal Revenue Code

The comprehensive body of tax laws and regulations governing the United States federal tax system.

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A tax return that contains information that is knowingly incorrect, misleading, or incomplete.

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Actions or failure to act that demonstrates a careless disregard for the safety or welfare of others, falling below a standard of care.