By issuing bonds with a ________, the corporation retains the right to pay off the bond prior to the maturity date.

Name: By issuing bonds with a ________, the corporation retains the right to pay off the bond prior to the maturity date.
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Question

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A call provision allows the corporation to redeem or pay off the bond prior to the maturity date, usually at a premium price. This gives the corporation the flexibility to retire the bond if interest rates decline or if they have excess cash flow.

By Issuing Bonds with a ________, the Corporation Retains the Right