Credit Rating Agencies

Question 1

1 the credit rating of your debt has just been changed from AAA to A by the credit rating agencies. How will this effect your cost of capital and the project being evaluated by the company.

What would you expect to be the impact of this change on your stock price.

2 if you are evaluating a projectwith conventional cash flows and find the internal rate of return to be below the cost of capital ,what do you know about the project NPV?

Question 2

Using only websites ending in .gov, report the current GDP, the current Federal deficit, the current Federal debt, and the bottom line of the current (last) budget approved by Congress (surplus or shortage). Note that the fiscal year for the federal government is October 1 – September 31.What inference can you draw from the numbers collected?

Question 3

Use the Internet to research companies who have potential (1) pollution problems, (2) environmental-disposal problems, or (3) demolition issues (specifically big-box stores). Next, analyze the current requirements of GAAP for your chosen issue and discuss the efficacy of the required accounting and/or disclosure in informing investors of material information. Provide support for the status quo or additional reporting.