Question: A sinking fund requirement on a bond issue is a restrictive provision. Comparing two identical bond issues from the same company except one has a

A sinking fund requirement on a bond issue is a restrictive provision. Comparing two identical bond issues from the same company except one has a sinking fund provision and the other bond issue does not.

a) Which bond issue has a higher required rate of return (%) and why?

b) Which bond issue would sell for more ($) and why?

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