Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
Bond continuous call option?
if a bond has a continuous call option could the bond issuer just call it like 1 day before the coupon payment is due to avoid paying the coupon. thanks
So they pay the coupon when they call right?
2 Answers
- JoeyVLv 79 years agoFavorite Answer
No they pay the accrued interest. For instance on a $1000 bond with an annual 6% coupon (1/2% per month) if they call the bond at par 10 months through the year then the company pays the bondholders $1000 + 10*0.005*1000 = $1050 per bond.
- torLv 49 years ago
When an issuer calls its bonds, it pays investors the call price together with accrued interest to date and, at that point, stops making interest payments.
Since they usually have to pay the accrued interest this will not be advantageous.
