Bond refunding is generally advantageous to the investor because they get a higher future interest rate.

Question

Quizplus · Accepted Answer

Bond refunding may be advantageous to the issuer as it can lower their borrowing costs, but it may not necessarily result in a higher future interest rate for the investor. The new bonds issued to replace the refunded bonds may have a lower interest rate, resulting in a lower return for investors.

Bond Refunding Is Generally Advantageous to the Investor Because They