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A sinking fund can be set up in one of two ways. Company can call in for redemption a certain percentage of the bond each

A sinking fund can be set up in one of two ways. Company can call in for redemption a certain percentage of the bond each year. Or company can buy the required number of bonds on the open market.Discuss the advantages and disadvantages of each procedure from the viewpoint of both the firm and its bondholders.

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