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a) BRIEFLY explain a callable bond in terms of how it benefits an issuer and how it imposes higher risk to the bond purchaser. b)
a) BRIEFLY explain a callable bond in terms of how it benefits an issuer and how it imposes higher risk to the bond purchaser.
b) Economic analysis suggests that the benefits from issuing callable bonds may be entirely offset by the higher rates required by lenders. Carefully describe 2 reasons why firms may still find it beneficial to issue callable bonds.
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