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Fundamentals of Financial Manageme...

8th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285065137

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

8th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285065137
Chapter 7, Problem 9Q
Textbook Problem
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Why is a call provision advantageous to a bond issuer? When would the issuer be likely to initiate a refunding call?

Summary Introduction

To identify: The advantage of call provision to a bond issuer and the situation when the issuer is likely to initiate a refunding call.

Bond Valuation:

Bond valuation refers to the evaluation of bond value at any point of time, which can be used for decision making. Valuation of bond is done for comparison and analysis.

Explanation of Solution

  • Call provision is beneficial to a bond issuer, as decrease in the interest rates leads to reduced cost of finances through other sources...

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Chapter 7 Solutions

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
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