Ranger Inc

question 6

Multiple Choice

Ranger Inc.would like to issue new 20-year bonds.Initially, the plan was to make the bonds non-callable.If the bonds were made callable after 5 years at a 5% call premium, how would this affect their required rate of return?

• A) There is no reason to expect a change in the required rate of return.
• B) The required rate of return would decline because the bond would then be less risky to a bondholder.
• C) The required rate of return would increase because the bond would then be more risky to a bondholder.
• D) It is impossible to say without more information.
• E) Because of the call premium, the required rate of return would decline.

---

Definitions:

Relevant Information

Information that is directly related to the subject or problem being discussed or examined.

Conciseness

The quality of being clear and precise in expression or communication, often involving using few words.

Document Conversation

The process of changing a document from one format to another.

Clinical Issue

A problem or concern that arises in the context of clinical care, requiring medical attention, decision-making, or intervention.