A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue.
The purpose of a sinking fund is to assure investors that provision has been made for repayment of bonds at maturity.
sinking fund. 1)A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt.
A sinking fund is a type of fund that is created and set up purposely for repaying debt. The owner of the account sets aside a certain amount of money regularly and uses it only for a specific purpose.
The purpose of the sinking fund is to provide for the orderly retirement of the issue. A sinking fund typically requires no call premium. provision that requires the corporation to retire a portion of the bond issue each year. The purpose of the sinking fund is to provide for the orderly retirement of the issue.
A sinking fund is a strategic way to save money by setting aside a little bit each month. Sinking funds work like this: Every month, you'll set money aside in one or multiple categories to be used at a later date. With a sinking fund, you save up a small amount each month for a certain block of time before you spend.
Sinking Fund – a fund set up to receive periodic payments If the payments are all the same and are made at the end of a regular time period, the sinking fund is essentially the same as an ordinary annuity.
The correct answer is E. Sinking fund provisions sometimes affect the bondholders adversely, and it mainly occurs if the interest rates decline after bond issuance.
Answer and Explanation: The following statements are correct: c. Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur...
Some other common examples of sinking funds are home repairs, medical expenses, vacations, Christmas gifts, building an emergency fund, or even an Amazon prime membership.