WordTechGuru Issues Bonds with a Call Provision, Which Allows Them

question 11

Multiple Choice

WordTechGuru issues bonds with a call provision, which allows them the option to pay off all or part of their bonds before the maturity date. Assuming WordTechGuru is like most companies whose bonds have a call provision, which of these statements best describes the WordTechGuru's call provision?

• A)The call provision will list call dates and prices.
• B)The call provision will likely list call dates, but without prices specified until closer to those dates.
• C)The call provision will be adjusted as to dates and prices at any time after issue, but before the maturity date.
• D)The call provision will likely have a single stated buyback price, regardless of the date it is called.

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Definitions:

Bargaining Range

The spectrum or zone between the opening positions of negotiating parties where an agreement is feasible.

Concessions

Compromises made by one or more parties in a negotiation, where they agree to relinquish certain demands or positions.

Target Point

The ideal outcome one hopes to achieve in a negotiation or goal-setting scenario.

Negotiator's Bottom Line

The least favorable terms a negotiator is willing to accept before walking away from a negotiation.