When Would It Make Sense for a Firm to Call

question 34

Multiple Choice

When would it make sense for a firm to call a bond issue?

• A) when the market price of the bond exceeds the call price, and market interest rates are greater than the bond's coupon rate
• B) when the market price of the bond exceeds the call price, and market interest rates are less than the bond's coupon rate
• C) when the market price of the bond is less than the call price, and market interest rates are greater than the bond's coupon rate
• D) when the market price of the bond is less than the call price, and market interest rates are less than the bond's coupon rate

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Definitions:

Informal

Relaxed, casual, or not adhering strictly to rules or formalities.

Specific Concern

A particular issue or problem that requires attention or resolution.

Effective Way

A method or approach that achieves desired results or outcomes with efficiency.

Internal Communication

The exchange of information and messages within an organization among its members.