Question: 1 . A company is contemplating a long - term bond issue. The executive committee is debating whether to include a call provision. Briefly explain

1 .

A company is contemplating a long

-

term bond issue. The executive committee is debating whether to include a call provision. Briefly explain the rationale for including a call provision. What are the costs

(

to the issuer

) ?

In the scenario where a company might be interested in exercising the call provision, would it be more likely that bond is trading at a discount or a premium to par?

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