Why are most corporate bonds callable? Who benefits from this feature, and what is the cost of adopting a call provision in a public bond issue?
Answer to relevant QuestionsWhy do corporations have their debt rated? Compare the role played by rating agencies and a company’s outside auditors. How would the availability of floating-rate debt affect the lease-versus-purchase decision? High-Gearing Incorporated is considering offering a new $40 million bond issue to replace an outstanding $40 million bond issue. The firm wishes to take advantage of the decline in interest rates that has occurred since the ...What is a low-regular-and-extra-dividend payout policy? Why do firms pursuing this policy explicitly label some cash dividend payments as “extra”? What are alternative ways in which investors can receive a cash return from their investment in the equity of a company? From a tax standpoint, which of these would be preferred, assuming that investors the same 15% tax rate ...
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