An 8% Debenture Has 5 Years of Call Protection and Is

question 77

Multiple Choice

An 8% debenture has 5 years of call protection and is thereafter callable at 100%, except that it is non-refundable below interest cost. Which of the following statements is correct?

• A) The debenture may be called any time during the next 5 years
• B) The debenture may not be called during the next 5 years
• C) The lender has the option to demand early repayment
• D) The bond should be called when the yield on similar non-callable bonds falls to 8%

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