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Category > Business & Finance Posted 02 Jun 2017 My Price 8.00

Tucker Corporation is planning to issue new 20-year bonds

Tucker Corporation is planning to issue new 20-year bonds. The current plan is to make the bonds non-callable, but this may be changed. If the bonds are made callable after 5 years at a 5% call premium, how would this affect their required rate of return?

a. There is no reason to expect a change in the required rate of return.  
b. The required rate of return would decline because the bond would then be less risky to a bondholder.  
c. Because of the call premium, the required rate of return would decline.  
d. The required rate of return would increase because the bond would then be more risky to a bondholder.  
e. It is impossible to say without more information.
 

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Status NEW Posted 02 Jun 2017 04:06 AM My Price 8.00

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