All other factors held constant, which of the following would cause the coupon rate on a new issue to be higher than it might otherwise be?
A) The existence of a sinking fund.
B) The presence of a put feature.
C) The existence of a par value.
D) The existence of a call feature.

Question

Quizplus · Accepted Answer

The existence of a call feature on a bond allows the issuer to redeem the bond before its maturity date, which is a risk to investors. To compensate for this risk, issuers typically have to offer a higher coupon rate.

All Other Factors Held Constant, Which of the Following Would