Ranger Inc. would like to issue new $20-$year bonds. Initially, the plan was to make the bonds non$-$alable if the tometes

Were made callable after $5$ years at a $5\%$ call premium, how would this affect their required rate of ittum?

The required rate of return would increase because the bond would then be more issyy to a bondthodeses.

The required rate of return would decline because the bond would then be less risky to a bondthodert

There is no reason to expect a change in the required rate of return.

Because of the call premium, the required rate of return would decline.

It is impossible to say without more information.