A call provision gives the issuing company the option to recall the debt issue at an effective interest rate less than the contract rate.

Name: A call provision gives the issuing company the option to recall the debt issue at an effective interest rate less than the contract rate.
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Question

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A call provision allows the issuing company to repurchase or "call" the debt issue before its maturity at a specified price, not necessarily at an effective interest rate less than the contract rate.

A Call Provision Gives the Issuing Company the Option to Recall