An annual report of a company contained the following paragraph in the notes to the financial statements:

The \(97 / 8 \%\) Senior Subordinated Debentures are redeemable at the option of [the company] at \(103.635 \%\) of the principal amount plus accrued interest if redeemed prior to [a certain date], and at decreasing prices thereafter. Mandatory sinking fund payments of \(\$ 3,000,000\) (which [the company] may increase to \(\$ 6,000,000\) annually) ... and are intended to retire, at par plus accrued interest, \(75 \%\) of the issue prior to maturity.

Required Answer the following questions:

a. What does the term debentures mean?

b. How much is the call premium initially? Does this premium decrease over time?

c. Under what circumstances might the company want to increase the sinking fund payments?