A company may retire bonds by all but which of the following means?
A) Paying them off at maturity.
B) The holders converting them to stock.
C) Purchasing the bonds on the open market.
D) Paying all future interest and cancelling the debt.
E) Exercising a call option.

Question

Quizplus · Accepted Answer

A company cannot retire bonds by paying all future interest and cancelling the debt, as this is not a recognized method of bond retirement. Bonds are typically retired by paying them off at maturity, conversion to stock, purchasing them on the open market, or exercising a call option.

A Company May Retire Bonds by All but Which of the Following