Which Factor Would Increase the Likelihood That a Company Would

question 56

Multiple Choice

Which factor 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:

Property Transfer

The act of changing ownership of real estate or personal property from one person or entity to another.

Fraud Or Duress

refers to unlawful pressure or deceit used to coerce someone into a contractual agreement, compromising the agreement's validity.

Bequest

A transfer of personal property through a will.

Legacy

A bequest; a testamentary gift of personal property. Sometimes incorrectly applied to a testamentary gift of real property.