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The Bond Refunding Decision in an Efficient Market

Published online by Cambridge University Press:  19 October 2009

Alan Kraus
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Extract

The majority of corporate bonds are callable before maturity at the option of the issuer. Unlike other security options (warrants, convertible bonds, etc.), the call provision cannot be resold; its value can be realized only by exercising it. The problem is to choose the optimal time to perform refunding (including the alternative of not refunding before maturity).

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 8 , Issue 5 , December 1973 , pp. 793 - 806
Copyright
Copyright © School of Business Administration, University of Washington 1973

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References

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