Purchase Solution

Debt ratings, types of leases, components of capital, credit analysis

Not what you're looking for?

Ask Custom Question

1. Explain why selecting a target senior debt rating is a reasonable approach to choosing a capital structure. Explain why a target senior debt rating of single- A is a prudent objective when there is only a very limited new issue market for non-investment-grade debt, and when investor willingness to purchase triple-B-rated debt is likely to be highly sensitive to the state of the economy.

2. What is a lease? Compare and contrast an operating lease and a capital lease. What is a leveraged lease? What are the main advantages of leasing when compared with conventional debt financing?

3. A company's capital structure consists solely of debt and common stock equity. What actions should be taken if the company believes it is:
(a) overleveraged?
(b) underleveraged?

4. What are the three steps in a comparative credit analysis? How can a firm select an appropriate rating objective?

5. What is subordinated debt? What is a debenture? What is convertible debt? What are loan covenants? Why do firms usually issue convertible bonds in that form rather than as senior debt?

Purchase this Solution

Solution Summary

Debt ratings, types of leases, components of capital and credit analysis are discussed. The expert compares and contrasts operating leases and a capital lease. The main advantages are given.

Purchase this Solution


Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Introduction to Finance

This quiz test introductory finance topics.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.