A callable security will be called in when flotation costs of a new security issue are less than savings from issuing a new security at the same interest rate.

Question

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Callable securities are typically called in by the issuer when interest rates have fallen, allowing the issuer to refinance the debt at a lower cost, not necessarily related to the flotation costs of a new issue versus savings from issuing at the same interest rate.

A Callable Security Will Be Called in When Flotation Costs