Which of the following factors would increase the likelihood that a company woul

ID: 2762569 • Letter: W

Question

Which of the following factors would increase the likelihood that a company would call its outstanding bonds at this time?

A provision in the bond indenture lowers the call price on specific dates, and yesterday was one of those dates.

The flotation costs associated with issuing new bonds rise.

The firm's CFO believes that interest rates are likely to decline in the future.

The firm's CFO believes that corporate tax rates are likely to be increased in the future.

The yield to maturity on the company's outstanding bonds increases due to a weakening of the firm's financial situation.

The firm's CFO believes that interest rates are likely to decline in the future..

As the interest rate decline in future they can set off this bond and issue new bond art lower cost

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