What is 'Call Premium'

Call premium is the dollar amount over the par value of a callable fixed-income debt security that is given to holders when the security is called by the issuer.

Explaining 'Call Premium'

1. The call premium is somewhat of a penalty paid by the issuer to the bondholders for the early redemption.

Further Reading

Callable bonds, reinvestment risk, and credit rating improvements: role of the call premium
www.sciencedirect.com [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

Dynamic recapitalization policies and the role of call premia and issue discounts
www.jstor.org [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

Behavioral aspects of the design and marketing of financial products
www.jstor.org [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

The effect of refinancing costs and market imperfections on the optimal call strategy and the pricing of debt contracts
onlinelibrary.wiley.com [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

Put-call parity and market efficiency
www.jstor.org [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

Transactions costs and the relationship between put and call prices
www.sciencedirect.com [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

The call, sinking fund, and term-to-maturity features of corporate bonds: An empirical investigation
www.jstor.org [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

To call or not to call convertible debt
www.jstor.org [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …

Financial indexes and instruments based thereon
patents.google.com [PDF]
With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted …