The Value of a Callable Bond

question 71

Multiple Choice

The value of a callable bond:

• A)is unlimited
• B)Is limited by its face value
• C)Is limited by its call price
• D)Is limited by high interest rates

---

Definitions:

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments.

Market Value

The current price at which an asset or service can be bought or sold, determined by supply and demand in the marketplace.

Required Return

The minimum expected return by investors for providing capital to a particular investment, taking into account the risk level.

Market Value

The cost at which an asset or service can presently be transacted in the market.