Why would a company pay to have its public debt rated by a major rating agency (such as Moody’s or Standard and Poor’s)? Why might a firm decide not to have its debt rated?
Answer to relevant QuestionsAccounting statements rarely report financial performance without error. List three types of errors that can arise in financial reporting.Some have argued that the market for original-issue junk bonds developed in the late 1970s as a result of a failure in the rating process. Proponents of this argument suggest that rating agencies rated companies too harshly ...A banker asserts, “I avoid lending to companies with negative cash from operations because they are too risky.” Is this a sensible lending policy?A target company is currently valued at $50 in the market. A potential acquirer believes that it can add value in two ways: $15 of value can be added through better working capital management, and an additional $10 of value ...In contrast to U.S. GAAP, IFRS permits management to reverse impairment on fixed assets which have increased in value since the time of their impairment. Revaluations are typically based on estimates of realizable value made ...
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