Progressive Corporation issued callable bonds. The bonds are most likely to be called if
A) interest rates decrease.
B) interest rates increase.
C) Progressive Corporation needs additional financing.
D) Progressive Corporation's stock price increases dramatically.
Progressive Corporation issued callable bonds. The bonds are most likely to be called if
A) interest rates decrease.
B) interest rates increase.
C) Progressive Corporation needs additional financing.
D) Progressive Corporation's stock price increases dramatically.
Related questions
| Bowdeen Manufacturing intends to issue callable, perpetual bonds with annual coupon payments. The bonds are callable at $1,180. One-year interest rates are 8 percent. There is a 60 percent probability that long-term interest rates one year from today will be 9 percent, and a 40 percent probability that they will be 7 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? Assume a par value of $1,000. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Coupon rate at par value | ??* % |
