IDEAS home Printed from https://ideas.repec.org/a/cup/jfinqa/v8y1973i05p793-806_01.html
   My bibliography  Save this article

The Bond Refunding Decision in an Efficient Market

Author

Listed:
  • Kraus, Alan

Abstract

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).

Suggested Citation

  • Kraus, Alan, 1973. "The Bond Refunding Decision in an Efficient Market," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(5), pages 793-806, December.
    • Handle: RePEc:cup:jfinqa:v:8:y:1973:i:05:p:793-806_01
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022109000019815/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. William Marshall & Jess B. Yawitz, 1980. "Optimal Terms Of The Call Provision On A Corporate Bond," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 3(2), pages 203-211, June.
    2. Chen, Zhaohui & Mao, Connie X. & Wang, Yong, 2010. "Why firms issue callable bonds: Hedging investment uncertainty," Journal of Corporate Finance, Elsevier, vol. 16(4), pages 588-607, September.
    3. Bodie, Zvi & Friedman, Benjamin M, 1978. "Interest Rate Uncertainty and the Value of Bond Call Protection," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 19-43, February.
    4. Deesomsak, Rataporn & Paudyal, Krishna & Pescetto, Gioia, 2009. "Debt maturity structure and the 1997 Asian financial crisis," Journal of Multinational Financial Management, Elsevier, vol. 19(1), pages 26-42, February.
    5. Hafezali Iqbal Hussain & Mohd Farid Shamsudin & Shahrullizuannizam Salehuddin & Noor H. Jabarullah, 2018. "Debt Maturity and Shari'ah Compliance: Evidence from Malaysian Panel Data," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 176-186.
    6. Bienz, Carsten & Faure-Grimaud, Antoine & Fluck, Zsuzsanna, 2011. "The Defeasance of Control Rights," Discussion Papers 2011/1, Norwegian School of Economics, Department of Business and Management Science.
    7. Raymond C. Chiang & M. P. Narayanan, 1991. "Bond Refunding In Efficient Markets: A Dynamic Analysis With Tax Effects," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(4), pages 287-302, December.
    8. Anderson, Christopher W., 1999. "Financial contracting under extreme uncertainty:: an analysis of Brazilian corporate debentures," Journal of Financial Economics, Elsevier, vol. 51(1), pages 45-84, January.
    9. William E. Mitchell, 1979. "Debt Refunding: The State and Local Government Sector," Public Finance Review, , vol. 7(3), pages 323-337, July.
    10. Zvi Bodie & Benjamin M. Friedman, 1977. "Heterogeneous-Expectations Model of the Value of Bonds Bearing Call Options," NBER Working Papers 0218, National Bureau of Economic Research, Inc.
    11. John Board & Charles Sutcliffe & William T. Ziemba, 2003. "Applying Operations Research Techniques to Financial Markets," Interfaces, INFORMS, vol. 33(2), pages 12-24, April.
    12. Andrew Ang & Richard C. Green & Francis A. Longstaff & Yuhang Xing, 2017. "Advance Refundings of Municipal Bonds," Journal of Finance, American Finance Association, vol. 72(4), pages 1645-1682, August.
    13. Alderson, Michael J. & Lin, Fang & Stock, Duane R., 2017. "Does the choice between fixed price and make whole call provisions reflect differential agency costs?," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 442-460.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jfinqa:v:8:y:1973:i:05:p:793-806_01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jfq .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.