The primary reason a company will retire bonds early is to:
A) increase the amount of debt on the books.
B) help the bondholders.
C) relieve the pressure of making high interest payments, since they may be able to borrow at a lower interest rate.
D) be able to issue more bonds.

Question

Quizplus · Accepted Answer

Retiring bonds early can be beneficial for a company if they are able to borrow at a lower interest rate, thereby reducing the pressure of making high interest payments. This may also improve the company's financial standing and creditworthiness. It is not typically done to increase the amount of debt on the books, help bondholders, or issue more bonds.

The Primary Reason a Company Will Retire Bonds Early Is