Examine the ratios for the two companies

Assignment Help Financial Management
Reference no: EM131329240

Which of the following two companies will have a higher bond rating:

Abbott Laboratories Inc (ticker: U:ABT) or Bristol Myers Squibb Company (U:BMY)?

Bond rating agencies, such as Moody's, Standard and Poor's, and Fitch, investigate, among other things, a company's debt and profitability ratios (see Chapter 2 for these ratios) to rate its bonds.

Examine these ratios for the two companies and explain which company's bonds are likely to have a higher rating and why.

Since these exercises depend upon real-time data, your answers will change continuously depending upon when your access the Internet to download your data.

Reference no: EM131329240

Questions Cloud

What is the price of the bond : A corporate bond's price is quoted as 98.110. What is the price of the bond if its par value is $1,000?- A corporate bond's price is quoted as 102.312. If the bond's par value is $1,000, what is its market price?
Present four examples of strategy planning activities : Present four examples of strategy planning activities from four different modules that are designed specifically for your hypothetical organization.
Implementing policies and procedures in an organization : write a 3-4 page paper outlining the importance of using strategy in implementing policies and procedures in an organization. Also, identify any organizational issue and discuss why policies and procedures are important in addressing the issue you..
What is the current yield on a 2 year t bill : The market's consensus forecast is that one-year T-bills will offer 6.25 percent next year. What is the current yield on a 2-year T-bill if the expectations hypothesis holds?
Examine the ratios for the two companies : Examine the ratios for the two companies and explain which company's bonds are likely to have a higher rating and why.
What is the effective annual required return : If the price of Series B preferred stock is $25 per share, what quarterly rate of return does the market require on this stock, and what is the effective annual required return?
Determine which markets to target short versus long term : Apply SWOT, Porter's Five Forces, or the BCG Matrix to analyze Kraft's strategic plan to expand into international markets. How would you determine which markets to target short versus long term?
What rate of return will you earn on that investment : Suppose you buy the stock today, hold it just long enough to receive the next dividend, and then sell it. What rate of return will you earn on that investment?
Does privacy always guarantee integrity : In which order should confidentiality and integrity be assured (should the entire message be encrypted first or last)? Give the rationale for your answer.

Reviews

Write a Review

Financial Management Questions & Answers

  What is her capital gain on the property

A few years ago, Kate purchased a small apartment building for $500,000 and made capital improvements which cost $90,000. During this period, she also claimed $45,000 in depreciation on her tax returns. If she sells the apartment building for $610,00..

  Research and find companies that offer cash discounts

Under what circumstances would it be advisable to borrow money to take a cash discount? RESEARCH and find companies that offer cash discounts. What type of discount do they offer?

  Calculate return on assets

ABC is a Winery in Napa Valley; the company grows and also buys grapes from farmers in the area, besides, wine making products from other vendors. After three years the organization needs calculations from their management to calculate Return on Asse..

  What would be the bonds clean price

Suppose you buy a bond with a 12 percent annual coupon, payable semiannually. You actually pay $ 1,050 for this bond. On the day you buy it, the next coupon is due in 3 months. What would be the bond's clean price?

  Research and development project scheduled

Your program has a research and development project scheduled to start in January 2017 which is expected to take 40 months to complete. The project is expected to cost a total of $150 million (then-year dollars), with cost expected to be incurred as ..

  Motorist pay for fuel efficient six speed transmission

A new six speed automatic transmission for automobiles offers an estimated 4% improvement in fuel economy compared to traditional four speed transmissions. If a four speed transmission car averages 30 MPG and gasoline costs $4.00 per gallon, how much..

  Compare and contrast the online trading companies

Research online trading sites and DRIPS as outlined below, and summarize your findings. Make sure to include a summary table of the relevant information. Search three online trading sites, and determine the requirements for trading, including the pri..

  Sale price of put

The common stock of Triangular File Company is selling at $97. A 26-week call option written on Triangular File’s stock is selling for $15. The call’s exercise price is $107. The risk-free interest rate is 11.4% per year. Suppose that puts on Triangu..

  Determine the volatility of the stock

Assume Black-Scholes: The continuously compounded risk-free interest rate is equal to the rate of dividend continuously being paid out by the stock. Determine the volatility of the stock

  Construct a pro forma income statement

Construct a pro forma income statement for the first year and second year for the following assumptions: In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same.

  What is the bonds after-tax yield

An investor recently purchased a corporate bond which yields 11.5%. The investor is in the 40% combined federal and state tax bracket. What is the bond's after-tax yield?

  Realize arbitrage profits in dollars net of transaction cost

An arbitrager at Deutsche Bank notices that the yield on Brazilian Real 6-month risk-free bills is 5.5% per annum and the yield on U.S. 6-month T-bills is 7% per annum. What transactions will the arbitrageur undertake to realize arbitrage profits in ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd