Which of the following statements about the sinking fund provisions for these bonds is most accurate? —

共享题干题 编号：2686054

Use the following information to answer Questions 10 and 11.
　 Consider $1,000,000 par value, 10-year, 6.5% coupon bonds issued on January 1, 2005. The bonds are callable and there is a sinking fund provision. The market rate for similar bonds is currently 5.7%. The main points of the prospectus are summarized as follows:
　 Call dates and prices:
　 ·2005 through 2009: 103.
　 ·After January 1, 2010: 102.
　 Additional information:
　 ·The bonds are non-refundable.
　 ·The sinking fund provision requires that the company redeem $100,000 of the principal amount each year. Bonds called under the terms of the sinking fund provision will be redeemed at par.
　 ·The credit rating of the bonds is currently the same as at issuance.

1.Which of the following statements about the sinking fund provisions for these bonds is most accurate?

A.An investor would benefit from having his bonds called under the provision of the sinking fund.
B.An investor will receive a premium if the bond is redeemed prior to maturity under the provision of the sinking fund.
C.The bonds do not have an accelerated sinking fund provision.

登录后查看答案及解析

选择购买的题库