Which of the Following Factors Would Increase the Likelihood That

question 62

Multiple Choice

Which of the following factors would increase the likelihood that a company would call its outstanding bonds at this time?

• A) A provision in the bond indenture lowers the call price on specific dates, and yesterday was one of those dates.
• B) The flotation costs associated with issuing new bonds rise.
• C) The firm's CFO believes that interest rates are likely to decline in the future.
• D) The firm's CFO believes that corporate tax rates are likely to be increased in the future.
• E) The yield to maturity on the company's outstanding bonds increases due to a weakening of the firm's financial situation.

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Definitions:

Disposable Income

Available financial resources destined for household spending and saving upon deducting income taxes.

Saving

The process of setting aside a portion of current income for future use, typically to hedge against unexpected expenses, achieve financial goals, or secure a retirement.

APS

Stands for "Automatic Processing System," but in different contexts, it could refer to various specific systems or technologies.

Total Saving

The portion of total income that is not consumed or spent, instead being reserved for future use or investment.