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.

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Definitions:

Environmental Dangers

Refers to potential threats from the surrounding environment that can harm living organisms or ecosystems.

Encourage Dependence

The act of fostering reliance by someone on something or someone else, potentially inhibiting their autonomy and self-sufficiency.

Gross Motor Development

The progression of physical abilities involving large muscle movements, such as walking, running, and jumping.

Fine Motor Development

The development of the ability to control small muscles, leading to skills like writing, buttoning, and picking up small objects.