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A Sinking Fund Call on a Bond

Question 42

Multiple Choice

A sinking fund call on a bond:


A) requires the company to pay an early-payment penalty to investors.
B) does not require the company to pay a call premium.
C) requires the company to redeem bonds at market price.
D) does not require the company to pay a small percentage of the issue every year.
E) requires the company to claim back all the interest payments from the bondholders.

Correct Answer:

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