A call provision, a sinking fund, and/or conversion are used to retire:
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A. B. C. D.A
A call provision, a sinking fund, and/or conversion are all methods used to retire corporate securities before their maturity date. Specifically, they are often used to retire bonds and preferred stock, which are debt and equity securities, respectively.
A call provision is a feature of many bonds and some preferred stock that allows the issuer to redeem the security before its maturity date. This is advantageous to the issuer if interest rates have fallen since the security was issued because the issuer can issue new securities at a lower interest rate and use the proceeds to retire the old security. This benefits the issuer by reducing its interest expense. Therefore, a call provision is used to retire bonds and preferred stock.
A sinking fund is a fund created by the issuer of a security for the purpose of retiring the security at maturity. The issuer contributes to the fund each year, and the fund is used to retire a portion of the outstanding securities each year. A sinking fund is often used to retire bonds because bonds have a specific maturity date.
Conversion is a feature of some preferred stock that allows the holder to convert the preferred stock into common stock at a specified price. If the market price of the common stock is higher than the conversion price, the holder will exercise the conversion option, and the issuer will retire the preferred stock. Therefore, conversion is used to retire preferred stock.
In summary, call provision, sinking fund, and conversion are all methods used to retire corporate securities before their maturity date, and they are often used to retire bonds and preferred stock, which are debt and equity securities, respectively. Therefore, the correct answer is A. Bonds and preferred stock.