BROWSE

Call Price

What is a 'Call Price'

A call price is the price at which a bond or a preferred stock can be redeemed by the issuer. This price is set at the time the security is issued. Also referred to as "redemption price".

Explaining 'Call Price'

For example, let's say the TSJ Sports Conglomerate issues 100,000 preferred shares with a face value of $100 with a call provision built in at $110. This means that if TSJ were to exercise its right to call the stock, the call price would be $110.

A company may exercise its right to call preferred stock if it wishes to discontinue payment of the dividend associated with the shares. It may choose to do this in an effort to increase earnings for common shareholders.


Further Reading


Price bubbles and crashes in experimental call markets
www.sciencedirect.com [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

The interrelations of finance and economics: Theoretical perspectivesThe interrelations of finance and economics: Theoretical perspectives
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

An examination of corporate call policies on convertible securitiesAn examination of corporate call policies on convertible securities
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Call option pricing when the exercise price is uncertain, and the valuation of index bondsCall option pricing when the exercise price is uncertain, and the valuation of index bonds
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Anticipated information releases reflected in call option pricesAnticipated information releases reflected in call option prices
www.sciencedirect.com [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Put-call parity and market efficiencyPut-call parity and market efficiency
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Indexing a bond's call price: an analysis of make-whole call provisionsIndexing a bond's call price: an analysis of make-whole call provisions
www.sciencedirect.com [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Why firms issue convertible bonds: the matching of financial and real investment optionsWhy firms issue convertible bonds: the matching of financial and real investment options
www.sciencedirect.com [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

Tests of the Black-Scholes and Cox call option valuation modelsTests of the Black-Scholes and Cox call option valuation models
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …

An empirical examination of the Black-Scholes call option pricing modelAn empirical examination of the Black-Scholes call option pricing model
www.jstor.org [PDF]
… is given in Smith et al. (1988) or Van Boening (1991, available upon request). In call markets, all trades occur at the calculated market price rather than at the submitted bid or offer prices. Thus, all bids to buy and …



Q&A About Call Price


What is the call price?

The call price is the price at which a bond or preferred stock can be redeemed by the issuer. This price is set at the time of issuance.

How can we use prices in financial transactions?

We can use prices as interest rates when lending money or as percentages when paying back loans with interest. We also use them as percentages when calculating sales tax and income tax.

What does "redemption" mean?

Redemption means to buy back an asset that has been previously sold.

When would a company choose to exercise its right to call preferred shares?

A company may choose to exercise its right to call preferred shares if it wishes to discontinue payment of the dividend associated with those shares. It may do this in order to increase earnings for common shareholders.

What is a price?

A price is the amount of money given in return for goods or services.

What does the word "price" mean in everyday language?

The word "price" means how much something costs.

Why do prices have different names depending on what they are used to purchase?

Because there are different ways to measure prices based on what they are used to buy. For example, if you were buying a good, it would be called the cost of that good; but if you were buying a service, it would be called the price of that service.

How can you determine a price?

Prices are determined by production costs, supply and demand, and monopolists.

Leave a Reply

Your email address will not be published. Required fields are marked *