If the Terms of the Sinking Fund Provision Are Not

question 72

Multiple Choice

If the terms of the sinking fund provision are not met,the _____ may take legal action against the company on behalf of the bondholders.

• A)bond parent
• B)arbitrator
• C)mediator
• D)trustee
• E)guardian

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Definitions:

Full Capacity

The maximum level of output that a company can produce under normal conditions over a given time period.

EFN

Expected Funds Needed, an estimation of the additional financing a company will require in the future based on its projected growth and existing financial structure.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or debt financing.

Leverage Ratios

Financial metrics that assess the level of debt in a company's capital structure relative to its equity or assets.