Difference between revisions of "Sinking fund"

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(Definitions)
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
:[[Sinking fund]]. A fund that accumulates cash to pay off bonds when they are retired.
 
:[[Sinking fund]]. A fund that accumulates cash to pay off bonds when they are retired.
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According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]],
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:[[Sinking fund]]. Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: (1) the company can call in for redemption (at [[par value]]) a certain percentage of bonds each year; or (2) the company may buy the required amount of bonds on the open market.
  
 
==Related concepts==
 
==Related concepts==

Latest revision as of 13:52, 28 October 2019

Sinking fund is a fund that accumulates cash to pay off bonds when they are retired.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Sinking fund. A fund that accumulates cash to pay off bonds when they are retired.

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Sinking fund. Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: (1) the company can call in for redemption (at par value) a certain percentage of bonds each year; or (2) the company may buy the required amount of bonds on the open market.

Related concepts

Related lectures