Which of the Following Statements Concerning the Use of Sinking

Multiple Choice

Which of the following statements concerning the use of sinking funds to repurchase a bond issueis NOT true?

A) Payments from the sinking fund are used to repurchase bonds.
B) The firm makes regular payments into a sinking fund administered by a trustee over the life of the bond.
C) The firm can reduce the amount of outstanding debt without affecting the cash flows of the remaining bonds.
D) Bonds can be issued with a sinking fund provision or a call provision, but not both.