Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 24, Problem 2PS

Sinking funds For each of the following sinking funds, state whether the fund increases or decreases the value of the bond at the time of issue (or whether it is impossible to say):

  1. a. An optional sinking fund operating by drawings at par.
  2. b. A mandatory sinking fund operating by drawings at par or by purchases in the market.
  3. c. A mandatory sinking fund operating by drawings at par.
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