Which of the Following Events Would Make It Less Likely

question 97

Multiple Choice

Which of the following events would make it less likely that a company would choose to call its outstanding callable bonds?

• A)Increase in interest rates.
• B)Decrease in interest rates.
• C)Increase in price of outstanding convertible bonds.
• D)A decrease in call premium.
• E)Answers b and c only.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a standardized set of accounting principles in the United States governing financial reporting and accounting.

Depreciation Requirements

The set of rules or guidelines dictating how an asset's cost should be allocated over its useful life.

Retained Earnings

Accumulated net income not distributed to shareholders as dividends but retained by the company for reinvestment in its operations or to pay debt.