The Marigold Realty Corporation needs $20 million to finance the purchase of a waterfront condominium project. Instead of issuing $20 million in bonds all maturing in 20 years, the company plans to offer 20 different serial bond issues of $1 million each. Alternatively, the company is considering the inclusion of a sinking fund provision on the debt issue. All of the following statements are true, EXCEPT:

Question 13 options:

	investors will prefer the bonds with a sinking fund because it reduces the uncertainty of when a particular issue will be called.
	the money that accumulates in the sinking fund is used to retire the full debt by maturity.
	if the company includes a sinking fund, it must be specified in the trust indenture.
	investors will view the bonds as being less risky if Marigold has a specific plan to retire its debt.