A call provision gives bondholders the right to demand, or "call for," the repayment of a bond. Typically, calls are exercised if interest rates rise, because when rates rise the bondholder can get the principal amount back and reinvest it elsewhere at higher rates.
Answer the following statement true (T) or false (F)
False
A call provision gives the issuing firm the right to "call in" the bonds for redemption prior to maturity. When interest rates decline, firms can recall (refund) high-cost debt that is outstanding and replace it with new, lower-cost debt. See 6-1: Characteristics and Types of Debt
You might also like to view...
In addition to serving as a persuasive tool, a sales proposal often serves as a sales contract
Indicate whether the statement is true or false.
The owner's equity is
A) added to assets and the two are equal to liabilities B) added to liabilities and the two are equal to assets C) subtracted from liabilities and the net amount is equal to assets D) subtracted from owner's equity and the net amount is equal to net income
Why is immigration easier for the highly skilled immigrant?
a. Companies are more willing to offer economic relocation assistance b. They are more likely to have information about employment opportunities c. Highly skilled workers have more disposable income and can visit perspective countries before migrating d. Highly skilled workers have a greater selection of opportunities available to them to choose from
Paulina works at the large corporate headquarters of a multinational company. She is a bit of a clean freak. Every week she cleans her office, including the windows. Her favorite window cleaner to use is Windex. In this case, Windex Window Cleaner is which of the following types of business products?
A. MRO supplies B. Installations C. Accessory equipment D. Process materials E. Component parts