Four Cs of credit analysis is used by analysts to evaluate creditworthiness. For each of the following scenarios, which of the Four Cs should be used for evaluation? Please also explain your answers.

[4 marks]

Scenarios	Which of the Four Cs
1. Company Z cannot issue dividends unless all bondholders have been paid the interests or coupons. In addition, the dividend payments cannot be greater than 30% of companys annual EBIT.
2. Company T decides to raise funds through debt issue. However, it operates in Video Rental industry, which is said to be a declining industry.