A requirement that a firm retire a certain number of its bonds each year is called a

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A sinking fund requirement requires a firm to retire a certain number of its bonds each year. A sinking fund requirement requires a firm to retire a certain number of its bonds each year by setting aside funds specifically for that purpose. A warrant requirement refers to the option for the bondholder to purchase shares of the company’s stock at a specific price. A putability requirement is the bondholder’s option to sell the bond back to the company prior to maturity. A convertibility requirement allows the bondholder to convert the bond into shares of the company’s stock.

A Requirement That a Firm Retire a Certain Number of Its