Question $7$

A firm has $$5$ billion outstanding in long term bonds. The firm currently has sufficient cash

flow to

make the scheduled coupon and principal payments but would struggle to make those

payments

in the future if a substantial weakening of the economy occurs. The most likely rating on

these

bonds is:

d$.$ CCC$.$

a$.$ B$.$

c$.$ BBB$.$

b$.$ AAA.