Corporate bonds with call features more likely to be called, study finds.
The article explores how likely it is for a company to call back a bond before it matures. By looking at factors like coupon rate, corporate tax rate, and interest rate, the researchers found that these influence the probability of a bond being callable. They also discovered that bonds with higher coupon rates, lower interest rates, and lower firm risk are more likely to have a call feature. Tests with real corporate bonds supported these findings.