Bonds with a call provision can be:
A) exchanged for common shares at the option of the bondholder.
B) redeemed prior to maturity at option of the issuing company.
C) exchanged for common shares at the option of the issuing company.
D) redeemed prior to maturity at the option of the bondholder.

Question

Quizplus · Accepted Answer

Bonds with a call provision allow the issuing company to redeem the bonds before their maturity date, typically at a predetermined price. This option benefits the issuer, especially when interest rates decline, allowing them to refinance the debt at a lower cost.

Bonds with a Call Provision Can Be