Question
What happens if there is a downgrade in bond rating? Suppose the major bond rating agencies unexpectedly downgrade the organization's credit rating from A to
What happens if there is a downgrade in bond rating? Suppose the major bond rating agencies unexpectedly downgrade the organization's credit rating from A to triple-B before the firm could initiate the refunding, resulting in a 7.5 percent coupon rate and flotation costs of 1.5 percent on the new issue.
How would these changes affect the refunding decision?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
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