Compare and contrast sinking funds and bonds. What are they and why are they issued?© BrainMass Inc. brainmass.com June 3, 2020, 9:59 pm ad1c9bdddf
Sinking funds: It is the amount of money that the company set aside for known future uses. For example, if a company have preferred stock, in order to ensure that dividend can be paid for preferred stock, the company may decide to set up a sinking fund. Sinking fund can also be set up in order to maintain the operations of the company. For example, if a ...
This solution of 250 words defines sinking funds and bonds and compare and contrasts them. It also discusses in what conditions a company uses them.