Dexter,Inc.has a bond issue outstanding.The issue's indenture provision prohibits the firm from redeeming the bonds during the first three years.This provision is referred to as the _____ provision.

Question

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The provision that prohibits the issuer from redeeming the bonds during the first few years is known as the deferred call provision. This clause is designed to protect bondholders from early redemption, which can be disadvantageous to them if interest rates have fallen since the bonds were issued. The other options, such as safeguard, market, liquidity, and sinking fund, do not pertain to this specific provision.