| Article ID: | iaor201522955 |
| Volume: | 12 |
| Issue: | 1 |
| Start Page Number: | 1 |
| End Page Number: | 13 |
| Publication Date: | Mar 1989 |
| Journal: | Journal of Financial Research |
| Authors: | Marr M Wayne, Ogden Joseph P, Kidwell David S |
| Keywords: | investment, statistics: empirical, statistics: regression |
In this study, empirical tests are conducted to determine the impact of a sinking fund on reoffering yields of a sample of new public utility bonds sold between January 1977 and March 1982. The findings of the regression analysis are consistent with the hypotheses that the value of the sinking fund varies with the default risk of the issuer and with market expectations of future interest rate movements, and that the sinking fund improves the liquidity of a bond issue.