Which of the Following Factors Would Increase the Likelihood That

question 46

Multiple Choice

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

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

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Definitions:

Borrowing

The act of receiving something with the intention to return it or its equivalent.

Registrar

An official in an academic institution responsible for maintaining student records, scheduling classes, and managing enrollments and graduations.

Address

To direct attention to a problem or situation with the intention of resolving it.

Credit Card Bill

A statement listing transactions, payments, and outstanding charges on a credit card account.