A Sinking Fund Is Useful to a Corporation Because

question 52

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.

---

Definitions:

Decision-Making

The process of making choices among alternative possible courses of action.

Referent Power

Influence based on the leader's personal traits, where followers identify with or want to emulate the leader.

Coercive Power

A form of authority that relies on the use of threats, punishment, or negative reinforcements to influence others' behavior or compliance.

Legitimate Power

A form of authority derived from a position of power within an organization, granting the ability to make decisions, command resources, and enforce obedience.