Which of the following provisions is a benefit to the issuer?
A) Put provision
B) Call provision
C) Conversion provision

Question

Quizplus · Accepted Answer

A call provision is a benefit to the issuer as it allows them to redeem the bonds before maturity at a predetermined price, which can be beneficial if interest rates fall or the issuer's credit rating improves. This gives the issuer flexibility to refinance at a lower cost or with more favorable terms. The put provision and conversion provision are beneficial to the bondholders as they give them the option to sell back the bonds or convert them into other securities, respectively.

Which of the Following Provisions Is a Benefit to the Issuer