Corporations typically have the right to repurchase a debt issue prior to maturity by paying the face value of the bond plus:
A) a call premium.
B) the amortized value.
C) the principal discount.
D) a balloon payment.

Question

Quizplus · Accepted Answer

Corporations often have the option to repurchase or "call" a debt issue before its maturity date by paying the face value of the bond plus a call premium. This premium compensates investors for the bond being called away before they can realize the full interest income they expected over the bond's life.

Corporations Typically Have the Right to Repurchase a Debt Issue