If your firm's bond spread increases significantly relative to the rest of the bond's in the market, what does this signal?

A.The market (investors) are suddenly more concerned about your firm's ability to pay back debt

B. This market (investors) feel as if your credit ratings on your debt are about to improve

C. The market (investors) feel as if your firm will suddenly have a dramatic increase in income

What is the most viable reason you, as a firm, should be concerned about your credit ratings?

A The firm's stock price may go down as a result

B So you can better control your cost of debt.

C Poor credit ratings mean a firm is eligible to issue more debt

D You are a more attractive firm in terms of sales and reputation

When comparing their cost of debt to other firms, Townsend, Inc. compares its Bond Credit Ratings to two other firms. Resuls are below. Based on the below, should Townsend expect to have the highest, lowest or mid cost of debt when compared to their competitors?

Firm Name	Bond Credit Rating
Alphabet Soup	"CCC"
Morris Corp	"BB"
Townsend, Inc.	"BBB"

A Townsend should have the LOWEST Cost of Debt

B Townsend should have the HIGHEST Cost of Debt

C Townsend should have the MID Cost of Debt