TY - JOUR T1 - Impact of Call Features on Corporate Bond Yields JF - The Journal of Fixed Income SP - 58 LP - 68 DO - 10.3905/jfi.2002.319325 VL - 12 IS - 2 AU - Louis H Ederington AU - Duane R Stock Y1 - 2002/09/30 UR - https://pm-research.com/content/12/2/58.abstract N2 - Financial research has often found that the impact of a call provision on bond required yield is statistically insignificant, despite the fact that fundamental theory maintains that optionality controlled by the issuer should increase the required yield. Theories of why issuers include a call provision suggest a possible explanation in that call provisions may reduce agency costs and provide signaling effects. These agency and signaling effects may serve to reduce the required yield, thus offsetting the conventional optionality effects of the call. This research supports this view—inclusion of a call provision does signal positive prospects. ER -