A call feature:
A)allows bondholders to convert their bond to a specified number of shares of common stock.
B)is not available on corporate bonds.
C)allows the corporation to buy outstanding bonds from current bondholders before the maturity date.
D)is only available with government securities.
E)is guaranteed by the corporation.

Question

Quizplus · Accepted Answer

A call feature allows the issuing corporation to repurchase bonds before their maturity date, typically at a premium price. This is beneficial for the issuer if interest rates decline, as they can refinance the debt at a lower rate.

A Call Feature