A Call Provision, Which Allows the Corporation to Force an Early

question 50

Multiple Choice

A call provision, which allows the corporation to force an early maturity on a bond issue, usually contains all but which of the following characteristics?

• A) most bonds must be outstanding at least 5 years before being called
• B) after the call date, the call premium tends to decline over time
• C) the provision typically calls for debt conversion into common stock
• D) the corporation will pay a premium over par for the bonds