The managers at the Lottadoe Corporation need to issue some bonds to raise funds for a major expansion.However,interest rates are currently high by historical standards,and some of the managers at Lottadoe predict that a few years from now,interest rates will be several percentage points below their current levels.Under these circumstances,the managers might decide to issue callable bonds.

Question

Quizplus · Accepted Answer

Callable bonds allow the issuer to call back or redeem the bonds before their maturity date, which would be beneficial if interest rates decrease in the future. This would allow the issuer to issue new bonds at a lower interest rate and save money on interest payments.

The Managers at the Lottadoe Corporation Need to Issue Some