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Prompt: Bonds are long term debt offerings issued by governments and corporations. Many corporate bonds contain...

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Finance

Prompt: Bonds are long term debt offerings issued bygovernments and corporations. Many corporate bonds contain a ‘callprovision’. This feature requires the issuer to pay a price abovepar value when the bond is ‘called’. This is the call premium.Discuss why a bond issuer would use a call feature and then discussthe investor’s pricing of a bond with a call feature. Include adiscussion of scripture as it applies to bonds as debtofferings.
Requirements: 250 words minimum

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3.8 Ratings (440 Votes)
An issuer may choose to call a bond when market interest rates decline as compared to interest rate of the bond That way the issuer can save money by paying off the bond and issuing another bond at a lower interest rate This is similar to refinancing the mortgage on your house so you can make lower monthly    See Answer
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Prompt: Bonds are long term debt offerings issued bygovernments and corporations. Many corporate bonds contain a ‘callprovision’. This feature requires the issuer to pay a price abovepar value when the bond is ‘called’. This is the call premium.Discuss why a bond issuer would use a call feature and then discussthe investor’s pricing of a bond with a call feature. Include adiscussion of scripture as it applies to bonds as debtofferings.Requirements: 250 words minimum

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