If bonds payable are not callable, the issuing corporation
A) can exchange it for common stock
B) can repurchase them in the open market
C) must get special permission from the SEC to repurchase them
D) is more likely to repurchase them if the interest rates increase

Question

Quizplus · Accepted Answer

If bonds payable are not callable, the issuing corporation cannot exchange them for common stock or repurchase them directly from the bondholders. However, they can repurchase them in the open market like any other investor. The corporation does not need special permission from the SEC to repurchase bonds payable. The interest rates increasing does not necessarily make it more likely for the corporation to repurchase them.

If Bonds Payable Are Not Callable, the Issuing Corporation