Band Ratings Companies pay rating agencies such as Moodys and S&P to rate their bonds, and the

Question:

Band Ratings Companies pay rating agencies such as Moody’s and S&P to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated; doing so is strictly voluntary. Why do you think they do it?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

See More Books

Question Posted: Apr 28, 2011 02:29 AM

See More Questions

Companies pay rating agencies such as DBRS to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated in the first place; doing so is...
Why do you think companies that practice good corporate governance tend to be successful in business?
Why do you think so many employers search for information about job applicants online using Google, Facebook, Twitter, and other online tools? Do you think these kinds of searches are ethical or...
The monochromatic emissivity of a diffuse-surface at 1600 K varies with wavelength in the following manner : = 0.4 for 0
As you switch a fan setting from its slowest speed to its highest, its angular speed v triples. (a) Does the period of rotation T of the fan blade increase, decrease, or stay the same? Explain. (b)...
Write an application that stores at least five different college courses (such as CIS101), the time it first meets in the week (such as Mon 9 am), and the instructor (such as Johnson) in a...
2. For which of the following geographic areas will separate disclosures be required if only the 10 percent asset test is considered? a United States b United States and Canada c United States,...
A feedforward only controller system is to be designed for the stirred-tank heating system shown in Fig E. Exit temperature T will be controlled by adjusting coolant flow rate, q c . The chief...
Assume a zero-coupon bond that sells for $383 will mature in 20 years at $2,150. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator...
There are N houses (numbered from 0 to N-1) along a street. In each of them, recyclable trash (plastic, glass, metal) is collected into separate bags. There are three trucks that collect the trash....
Real and Nominal Returns Are there any circumstances under which an investor might be more concerned about the nominal return on an investment than the real return?
Bond Ratings U.S. Treasury bonds are not rated. Why? Often, junk bonds are not rated. Why?
What is the difference between a per se violation and a violation that is analyzed using a rule of reason?
1. A T-shaped beam with an overhang is supported and loaded as shown in Fig. 1. Draw shear force diagram and calculate (a) the shear stress at a point D, 2 m from support A and 25 mm from the top of...
Question 1: Write Specific Case to brief is Flying Fish Bikes, Inc. v. Giant Bicycle, Inc., 181 F.Supp.3d 957? Grading Rubric for Case Brief Written Case Brief 3 (Exceeds Identification - Heading...
A local gym is looking in to purchasing more exercise equipment and runs a survey to find out the preference in exercise equipment amongst their members. They categorize the members based on how...
A fountain with an opening of radius 0.015 m shoots a stream of water vertically from ground level at 6.0 m/s. The density of water is 1000 kg/m. (a) Calculate the volume rate of flow of water. (b)...
35 h/2 21 3 3 2t 3. A thin-walled beam has the cross-section shown in the figure. If the beam is subjected to a bending moment Mx in the plane of the web 23 calculate the direct stress at the points...
What were the provisions of and purpose for the Emergency Economic Stabilization Act? Appendix
When an electric field is applied to a shallow bath of vegetable oil, why do tiny bits of thread floating in the oil align with the field like compasses in a magnetic field?
Why do markets sometimes fail to generate efficient outcomes?
BQ, Inc., is considering making an offer to purchase iReport Publications. The vice president of finance has collected the following information: BQ iReport Price-earnings...
Assume that the following balance sheets are stated at book value. Suppose that Meat Co. purchases Loaf, Inc. The fair market value of Loaf's fixed assets is $9,500 versus the $6,700 book value...
Silver Enterprises has acquired All Gold Mining in a merger transaction. Construct the balance sheet for the new corporation if the merger is treated as a purchase of interests for accounting...
20 On January 1, Year 1, X Company purchased equipment for $80,000. The company estimates that the equipment will have a useful life of 10 years and a residual value of $5,000. X Company depreciates...
Discuss why it is important for company managers to understand and use social capital knowledge to help build social ties among their skilled knowledge workers so they can build employee loyalty...
Kate lives in a house close to a local university, and she traditionally has rented a garage apartment in the back of her property to students for $750 per month. Kate wants to transfer the title to...

Band Ratings Companies pay rating agencies such as Moodys and S&P to rate their bonds, and the

Question:

Step by Step Answer:

Companies pay to have their bond...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Corporate Finance questions