A company may retire bonds by all but which of the following means?
A)Exercising a call option.
B)The holders converting them to stock.
C)Purchasing the bonds on the open market.
D)Paying them off at maturity.
E)Paying all future interest and cancelling the debt.

Question

Quizplus · Accepted Answer

Purchasing bonds on the open market, exercising a call option, and paying them off at maturity are all means through which a company can retire bonds. Converting bonds to stock is not retiring them, but rather exchanging them for a different asset. However, paying all future interest and cancelling the debt, known as defeasance, is another way a company can retire bonds.

A Company May Retire Bonds by All but Which of the Following