QUESTION 2 The following information is given for Texaco for 2000 (in millions): Texaco's Bond Ratings Texaco Altman's Z-score Model $7,053 Total current assets Moody's: Aa 6.56 x working capital /total assets 3.26 x retained earnings / total assets Standard & Poors': AA Total current liabilities 5,984 Total assets 30,867 6.72 x EBIT /total assets Retained earnings 1.05 x BV of equity / 11,297 BV of debt Earnings before tax 4,218 = Z-score Interest expense Failing: below 1.1 458 Total stockholders' equity 13,444 Gray: 1.1-2.6 Healthy: above 2.6 Total liabilities 17,423 Altman's working capital Z-score calculation is: a. 2.857 b..035 C. .436 d. .227 QUESTION 3 Following Question 2, the Z-score for Texaco is: a. 1.936 b.2.381 C. 3.248 Od. 3.148 QUESTION 4 Following Question 2, Texaco's Altman's Z-score is classified as: a. Gray b. Failing C. Healthy Od. Investment grade QUESTION 5 Following Question 2, Texaco's bond rating means: | a. Texaco has a healthy Z-score b. Texaco has ment grade or high quality bonds C. Texaco has the highest bond rating available from Standard & Poor s d. Texaco had a junk bond rating