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I have a Capital Budgeting (Theory) question. The credit rating is downgraded from AAA to A. Is this an upside or downside risk for the

I have a Capital Budgeting (Theory) question.

The credit rating is downgraded from AAA to A.

Is this an upside or downside risk for the creditors? Explain why (4 marks)

The change in credit rating does not have any impact on the cost of equity Critically evaluate this statement as correct or incorrect. (6 marks)

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