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A sinking fund is useful to bondholders because: Question 5 options: it stops the company from going under or into default. a balloon payment is

A sinking fund is useful to bondholders because:

Question

5

options:

it stops the company from going under or into default.

a balloon payment is necessary to fully pay off the bonds at maturity.

the funds are usable at the option of the bondholders.

when a firm has difficulty making payments this sends a signal of potential default.

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