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Impact of a company's bond rating on cost of capital

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What impact does a company's bond rating have on its cost of capital? What is the relationship between interest rates and bond prices?

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The solution explains the impact of a company's bond rating on cost of capital and the relationship between interest rates and bond prices.

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What impact does a company's bond rating have on its cost of capital?

The cost of capital reflects the risk associated with the firm. Higher the risk, the more would be the cost. The bond ratings are a representation of the risk of a firm. A firm with a higher rating has a lower risk as compared to a ...

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