According to an article in the Wall Street Journal, in May 2015, Moody's Investors Service cut its rating on McDonald's bonds from A3 to A2.
a. What is Moody's top bond rating? Under what circumstances would Moody's, or the other bond rating agencies, be likely to cut the rating on a firm's bonds?
b. What will be the likely result of this rating's cut for the interest rate McDonald's will have to pay when it sells new bonds? Briefly explain.