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Urgent answers needed If the credit rating of a company decreases significantly, what is the most likely effect on its financing costs and borrowing ability?
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If the credit rating of a company decreases significantly, what is the most likely effect on its financing costs and borrowing ability? O The company's default risk may decrease O The company may have to provide additional collateral to borrow money The company's interest rates charged on debt may decrease The company may find it easier to borrow money A bond matures in three years and pays an annual coupon of 15%. The bond is currently trading at its par value at of $100. Calculate the Macaulay duration of the bond. A mining company, with a stable growth of 1%, has net income of $50 million and the market value of its equity is $250 million. The company decides to increase its dividend payout ratio by 2%. What will most likely happen to the company's price-to-earnings (P/E) ratio? O The P/E ratio will decrease O The P/E ratio will remain unchanged O The P/E ratio will increase The following data is available relating to the performance of a hedge fund and its benchmark portfolio. The risk-free rate of return during the sample period was 1%. What is the Information Ratio for the hedge fund? Hedge Fund Benchmark Portfolio Average return 10.59% 8.11% Standard deviations of returns 23.85% 16.55% Beta 1.75 0.95 Tracking error 3.19%Step by Step Solution
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