Marietta Hotels Used a Twenty-Five-Year, $50 Million Bond Issue to Finance

Marietta Hotels used a twenty-five-year, $50 million bond issue to finance its expansion. In its plan to ensure that funds would be available to redeem the bonds at maturity, it arranged that none of the bonds would mature during the first fifteen years. Therefore, 10 percent of the bonds mature each year until all the bonds are retired at the end of the twenty-fifth year. This is an example of the ____ method of repayment.

A) sinking fund
B) selling new bonds
C) registered bond
D) selling old bonds
E) serial bond

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