Dell’s long-term debt is rated Baa1 by Moody’s, BBB+ by S&P, and BBB+ by Fitch.

(c) Dell’s long-term debt is rated Baa1 by Moody’s, BBB+ by S&P, and BBB+ by Fitch. What factors would be important to consider in attempting to quantify the relative riskiness of Dell compared with other borrowers?

Credit rating agencies assess companies’ default risk by focusing primarily on macroeconomic factors such as the projected level of interest rates.

Credit rating agencies assess companies’ default risk by gauging the level of debt in relation to the companies’ operating cash flow, profitability ratios, and the ratios for long-term creditworthiness.

Credit rating agencies assess companies’ default risk by comparing the target company against companies that have defaulted on their debt.

Credit rating agencies assess companies’ default risk by focusing primarily on non-quantitative measures such as the quality of the company’s management team.

Mark 1.00 out of 1.00

The correct answer is: Credit rating agencies assess companies’ default risk by gauging the level of debt in relation to the companies’ operating cash flow, profitability ratios, and the ratios for long-term creditworthiness.

 

Sharing is caring!

Have any Question or Comment?

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!