Share
Explore BrainMass

Bonds and Debts and Interest

How does the bond rating affect the interest rate paid by a corporation on its bonds?

Solution Preview

Bonds or debt represent debt payable by a company to the bondholders or to the lenders. On liquidation bondholders get first preference for repayment then the preferred shareholders are paid. Interest on bonds must be paid in good times or bad, like any other debt. In case of preferred shares also rate of dividends is fixed but there is no guarantee of ...

Solution Summary

The solution describes how bonds affect the interest rate.

$2.19