(9) Companies tend to put a constraint on their bond rating. That is, they do not allow the debt ratio to increase so much that the rating drops below the constraint. For a non-financial firm, the constraint is often BBB (investment grade). Which of the following reasons explain the constraint? A. A firm's capital supply can be abundant and infinite once its rating becomes junk. B. A firm's products and services can expand significantly once its rating becomes junk. C. A firm's cost of debt can rise dramatically once its rating drops below investment grade. D. All of the above. (10) A new project of Disney is to build a theme park in Brazil. 20% of the total revenues of the new project will be generated from people who would have gone to Disneyland in Orlando if the project did not exist. Disney has a brand name in this type of business. Assume that Disney will not lose the 20% of its market to any other competitors at all. What is the proper estimate of revenues for the new project? A. 80% of the total revenues of the new project B. 100% of the total revenues of the new project C. 120% of the total revenues of the new project D. None of the above 1