According to an article on cnbc.com, in October 2018, S&P cut its rating on General Electric’s bonds from A to BBB+.
a. What is S&P’s top bond rating? Under what circumstances would S&P or one of 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 General Electric will have to pay when it sells new bonds? Briefly explain.