A company may retire bonds by:
A) Exercising a call option.
B) The holders converting them to shares.
C) Purchasing the bonds on the open market.
D) Paying them off at maturity.
E) All of these.

Question

Quizplus · Accepted Answer

A company may retire bonds in any of the ways mentioned in the options. They can exercise a call option, where they can buy back the bonds before their maturity date. The bondholders can also convert their bonds into shares, which gives the company equity financing. The company can purchase the bonds on the open market, which is known as an open market repurchase. Lastly, the company can pay off the bonds at maturity, which is the most common method of retiring bonds.

A Company May Retire Bonds By