Which of the Following Factors Are Not Taken into Consideration

question 52

Multiple Choice

Which of the following factors are not taken into consideration by bond rating companies when evaluating a bond?

• A) Fixed charge coverage
• B) Debt-to equity ratio
• C) Liquidity ratio
• D) Significance of the company within the industry
• E) Bond rating companies take into consideration all of the above features

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Definitions:

Market Rate

The prevailing price determined by supply and demand in the open market for services or commodities.

Interest

The payments made for the use of money.

Interest Rate

The interest rate is the amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal, often noted annually.

Total Investment

The overall amount of money allocated to purchasing assets or towards spending that is intended to generate future revenue.