A corporation must buy back its callable bonds through open market transactions.

Question

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While a corporation can choose to buy back its callable bonds through open market transactions, it is not a requirement. Callable bonds give the issuing company the option to redeem or "call" the bonds before their maturity date, which allows them to potentially save money if interest rates have fallen since the bonds were issued. However, if the company chooses not to call the bonds, they will continue to pay interest to bondholders until the bonds reach their maturity date.

A Corporation Must Buy Back Its Callable Bonds Through Open