Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?
A)8% maturing 1-15-2016
B)8% maturing 1-15-2007
C)4% maturing 1-15-2012
D)4% maturing 1-15-2007

Question

Quizplus · Accepted Answer

8% maturing 1-15-2016. Bonds with the highest coupon rates would be the first to most likely get called. The issuer will look to issue new debt at a lower rate. Since there are two 8% bonds, the one that would most likely get called are those with the longest maturity.

Assuming All of the Following Bonds from the Same Issuer