An analyst in the risk management department of Kenowefa Bank is evaluating the credit worthiness of an Italian based beverage company, Campari, using the template of credit rating agencies. He prepared the following table: Funds from Total EBITDA Total Operations / Return on Debt / Interest Debt/Total Total Debt Capital EBITDA Coverage Capital (%) (%) (%) (x) (x) 0.2 84.3 0.1 1.0 13.9 42.9 22.9 8.2 3.2 4.9 Company Associated British Foods ple Campari - Milano SpA European Food, Beverage and Tobacco Median 42.4 23.6 6.55 2.85 6.45 2.1 Which of the two companies has the lowest credit rating? Why? 2.2 The analyst further investigates for investment several bonds issued by Campari: - Bond A is a mortgage paythrough, a collateralized mortgage obligation (CMO) - Bond B is a callable bond - Bond C is a convertible bond (into the equity of the same issuer) If a sharp decline in interest rates is expected what type of risk would be a primary concern for the analyst and which bond would he most likely choose for investment? Why