7. Call provisions [LO 5.2] TMCC has the right to buy back the securities on the anniversary date at a price established when the securities were issued (this feature is a term of this particular deal).

What impact does this feature have on the desirability of this security as an investment? On 28 March 2008, Toyota Motor Credit Corporation (TMCC), a subsidiary of Toyota Motor, offered some securities for sale to the public. Under the terms of the deal, TMCC promised to repay the owner of one of these securities $100 000 on 28 March 2038, but investors would receive nothing until then. Investors paid TMCC

$24 099 for each of these securities; so they gave up $24 099 on 28 March 2008, for the promise of a $100 000 payment 30 years later.