Bond Ratings Measure a Bond's Credit Risk

question 22

True/False

Bond ratings measure a bond's credit risk.

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Definitions:

Stockholders' Equity

The remaining value of a company's assets after all debts are paid off, which reflects the shareholders' stake in the corporation.

Assets

Resources owned or controlled by a company that are expected to produce future economic benefits.

Net Income

The remaining profit of a company after expenses and taxes are taken out of its revenue.

Accrued Expense

Costs that have been incurred for goods or services but have not yet been paid for or recorded in the financial statements.