Question

In: Finance

If included within the bond's indenture, which of the following is an option that can be...

If included within the bond's indenture, which of the following is an option that can be exercised by the bond issuer?

a.

convertible

b.

callable

c.

putable

d.

sinking fund

Solutions

Expert Solution

Answer b: Callable

Here bond issuer has the right to specified buy the bond from the bond holder, whereas in puttable bond has bond holder right to give back to to the bond issuer a bond for one or specified date. In convertible bonds bond holder has right to exchange the bond for shares. Sinking fund is a fund that is kept aside from the revenue periodically to meet future capital expenses or pay off debts.


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