Question
Please respond to this post: Although rating bonds is voluntary, it is a vital action that could benefit the company greatly. By rating their bonds,
Please respond to this post:
Although rating bonds is "voluntary", it is a vital action that could benefit the company greatly. By rating their bonds, it gives the company an idea about how risky the bond would be to investors. Many large investors are not allowed, or banned, to invest in bonds that are not rated, so a company rating their bonds would make it available to these large investors. It provides certain benefits to the company when they do have their bonds rated despite the costs. By taking this action, companies can raise funds easier from the market. Also, investors would easily pay more for rated bonds compared to unrated bonds.
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