When Would It Make Sense for a Firm to Call

question 7

Multiple Choice

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

• 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
• E)when the market price of the bond equals the call price,and market interest rates are equal to the bond's coupon rate

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Definitions:

SCLC

The Southern Christian Leadership Conference, an African-American civil rights organization founded in 1957, which played a major role in the civil rights movement.

SNCC

The Student Nonviolent Coordinating Committee, a key organization in the American civil rights movement of the 1960s, known for its youth-led activism, sit-ins, and freedom rides.

COFO-led

Led by the Council of Federated Organizations, a coalition of major civil rights groups in Mississippi during the 1960s.

Freedom Summer

A volunteer campaign in the United States launched in June 1964 to attempt to register as many African American voters as possible in Mississippi.