A call feature allows the corporation to buy outstanding bonds from current bondholders before the maturity date. It is not related to converting bonds to shares of common stock and is available with corporate bonds as well as government securities. It is not guaranteed by the corporation.

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A Call Feature

Question 109

Multiple Choice

A call feature

A) Allows bondholders to convert their bonds to a specified number of shares of common stock.
B) Is not available for corporate bonds.
C) Allows the corporation to buy outstanding bonds from current bondholders before the maturity date.
D) Is available only with government securities.
E) Is guaranteed by the corporation.

Correct Answer: