Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 15, Problem 9CT
Summary Introduction

Callable bond:

The callable bond is that bond which has a special provision that allows that the issuer can repurchase the bonds at a price which is predetermined. This bond has a special call feature which allows that the bonds can be redeemed at a pre-decided specified date and price.

To explain: The situation when the yield to maturity is higher than the yield to call for a callable bond.

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