Bonds That Can Be Redeemed at Par at the Option

question 57

Multiple Choice

Bonds that can be redeemed at par at the option of their holders either on a specific date after the date of issue and every 1 to 5 years thereafter or when and if the firm takes specified actions such as being acquired, acquiring another company, or issuing a large amount of additional debt are called

• A) putable bonds.
• B) floating-rate bonds.
• C) junk bonds.
• D) zero coupon bonds.

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Definitions:

Trademark

A sign, term, or expression that is legally recognized or traditionally used to denote a corporation or merchandise.

Equity Method

Accounting for investments where the investing entity has significant influence, adjusting the investment value for earnings, losses, and dividends received.

Intercompany Profit

Profits generated from transactions between companies within the same corporate group, which may be eliminated during consolidation.

Net Increase/Decrease

This refers to the overall rise or fall in a particular financial metric or account over a specified period.