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26 March, 03:19

Under what circumstances would a firm be more likely to buy the required number of bonds

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  1. 26 March, 03:22
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    It happens when a firm has a bond that would reach its maturity. It enters a "sinking fund" which is a way to pay it before it does. In this situation, it is required to have a number of bonds and catch up with the bond that is due to mature. Bonds in a sinking fund also offers lower interest rates for the firm and now makes the owner sell it to other investors. This way a firm can avoid financial problems in the future.
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