A company may retire bonds by:
A) Exercising a call option.
B) The holders converting them to stock.
C) Purchasing the bonds on the open market.
D) Paying them off at maturity.
E) All of these.

Question

Quizplus · Accepted Answer

A company may retire bonds through any of the above methods. Exercising a call option involves calling in the bonds before maturity by paying the call price. Bondholders may also convert their bonds into stock at a predetermined rate. Purchasing the bonds on the open market involves buying them back from bondholders who are willing to sell, while paying off bonds at maturity involves paying the face value and accrued interest when the bonds mature.

A Company May Retire Bonds By