If a firm retires or extinguish 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 correct answer is the call price. When a firm decides to retire or extinguish a debt issue before its maturity, it typically pays the call price, which is a predetermined amount outlined in the debt's contract. This price often includes the principal amount plus any accrued interest and possibly a premium to compensate the lenders for the early repayment.

If a Firm Retires or Extinguish a Debt Issue Before