If bonds payable are not callable, the issuing corporation
A) can exchange them for common stock
B) can repurchase them in the open market
C) must get special permission from the SEC to repurchase them
D) is more likely to repurchase them if the interest rates increase

Question

Quizplus · Accepted Answer

If bonds payable are not callable, the issuing corporation cannot exchange them for common stock or repurchase them directly from the bondholders. They may be able to repurchase them in the open market, but this is not guaranteed. They do not need special permission from the SEC to repurchase them, but they may need to follow certain rules and regulations related to insider trading and material nonpublic information. The interest rates do not have a direct impact on whether the corporation is more likely to repurchase them.

If Bonds Payable Are Not Callable, the Issuing Corporation