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What is Call Option in NCD?


In the context of NCDs, a call option is the company's right to request that the investor return the NCD in exchange for the original investment amount. By including a call option, the company gains the ability to be flexible with their financial decisions. For instance, if NCD interest rates decrease and the company can obtain funds at a lower rate elsewhere, it can choose to exercise the call option and return the money to the investor while raising funds from the market at a lower interest rate.