Question: When a bond indenture includes a sinking fund provision, Multiple Choice firms must establish a cash fund for future bond redemption. bondholders may lose because

When a bond indenture includes a sinking fund provision,

Multiple Choice

firms must establish a cash fund for future bond redemption.

bondholders may lose because their bonds can be repurchased by the corporation at below

-

market prices.

firms must establish a cash fund for future bond redemption, and bondholders always benefit because principal repayment on the scheduled maturity date is guaranteed.

None of the options are true.

bondholders always benefit because principal repayment on the scheduled maturity date is guaranteed.

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