In August 2017, Tesla Motors raised $1.8 billion in corporate bonds,

Priced at 5.3%, 8-year notes. The bonds were subordinated to more senior

debt and received a B- rating from S&P and a B3 rating from Moody's.

(1) Using the analytics discussed in our class, and traditional metrics,

what does your group think should be Tesla's bond rating before

(June 30) and just after the new bond issue?

(2)Would your answer change if the firm raised an additional $3 billion in

bonds to meet production objectives?

(3)What is your estimate of the Bond Rating Equivalent (BRE) as of

recent (Q1-2019) financials and recent (June 27, 2019) stock price?

(4)Given your answers to 1, 2 & 3 (above) what are your expected

cumulative PD and LGD for Tesla for the next one-year and five (5)

years?

(5)What are the bonds issued in 2017 now (October 31, 2019) selling at

and what is the bond's yield to maturity?

(6)Which of the two Z-Score models (Z or Z") is most applicable to a firm

like Tesla? Why?

(?)What are the main differences between Zand Z"? List up to four

differences.