The call feature is an advantage to the issuing firm if _______.
A) the bond has a floating rate
B) interest rates decline
C) the bond has a low par value
D) interest rates increase

Question

Quizplus · Accepted Answer

The call feature allows the issuing firm to repurchase bonds before their maturity date, typically at a set price. If interest rates decline, the firm can refinance the debt at a lower cost, making the call feature advantageous.

The Call Feature Is an Advantage to the Issuing Firm