If a firm retires or extinguishes a debt issue before maturity, the specific amount they pay is:
A) the amortization amount.
B) the call price.
C) the sinking fund amount.
D) the spread premium.

Question

Quizplus · Accepted Answer

The specific amount a firm pays to retire or extinguish a debt issue before its maturity is known as the call price. This price is typically set at the time the debt is issued and is often higher than the face value of the debt to compensate the lender for the early repayment.

If a Firm Retires or Extinguishes a Debt Issue Before