Q570
In call provision, it is stated that company will pay to issue an amount
A.
higher than par value
AnswerB.
lower than par value
C.
equal to par value
D.
zero to par value
Answer: Option A
Solution
Answer: Option A
Solution:
In call provision, it is stated that company will pay to issue an amount higher than par value. A call provision is a provision in a bond contract that gives the issuing corporation the right to redeem the bonds under specified terms prior to the normal maturity date. The call provision generally states that the company must pay the bondholders an amount greater than the par value if they are called.