Holdean Property Development Ltd

question 43

Multiple Choice

Holdean Property Development Ltd. has been downgraded to a BB rating (below investment grade) by the major debt rating agencies. What is the immediate consequence of the reclassification?

• A) The company's shareholders are demanding a higher dividend payout.
• B) Current bond holders are experiencing a decline in the value of the company's bonds.
• C) Current bond holders are requiring and receiving a higher coupon payment on the company's bonds.
• D) Holdean Property Development Ltd. has a higher weighted average cost of capital.
• E) Banks and financial institutions are legally empowered to step in and restructure Holdean's debt.

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Definitions:

Personal Style

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Letter Reports

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Board Of Directors

A group of individuals elected to represent shareholders and make decisions on major company issues, including corporate management and policy making.

Letter Of Transmittal

A formal document that accompanies a report, proposal, or other document, summarizing its key points or instructions for its use.