1) Which of the following events would make it least likely that a company would...
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Accounting
1) Which of the following events would make it least likely that a company would choose to call its outstanding callable bonds and why?
A Market interest rates decline sharply. B The companys bonds are downgraded. C Market interest rates rise sharply. D Inflation increases significantly. E The company's financial situation deteriorates significantly.
2) Under normal conditions which of the following would make it more likely to decrease the coupon rate required for a bond to be issued at par?
A) Adding additional restrictive convenants
B) Adding a call provision
C) The rating agencies change the bond's rating from BB to AAA
D) Making the bond a first mortgage bond rather than a debenture
E) Adding a sinking fund
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