The Decision to Refund a Callable Bond

question 162

Multiple Choice

The decision to refund a callable bond

• A) should be made only if interest rates have increased.
• B) is a net working capital decision.
• C) is a capital budgeting decision.
• D) is a financing decision.

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Definitions:

Stock Dividend

A distribution of additional shares of a company to its shareholders, rather than paying a cash dividend.

Stock Subscription

Stock subscription refers to the process of offering new shares to existing or potential investors, often before the public offering.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.