A Deferred Call Provision Is Which One of the Following

question 107

Multiple Choice

A deferred call provision is which one of the following?

• A)requirement that a bond issuer pay the current market price, plus accrued interest, should the firm decide to call a bond
• B)ability of a bond issuer to delay repaying a bond until after the maturity date should the issuer so opt
• C)prohibition placed on an issuer which prevents that issuer from ever redeeming bonds prior to maturity
• D)prohibition which prevents bond issuers from redeeming callable bonds prior to a specified date
• E)requirement that a bond issuer pay a call premium which is equal to or greater than one year's coupon should that issuer decide to call a bond

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Definitions:

Account Payable

A liability account that records the amounts owed by a business to suppliers for goods or services purchased on credit.