How reliable do you find rating agencies ratings

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Reference no: EM131027754 , Length: word count:1000

ASSIGNMENT

Ratings agency Standard & Poor's (S&P) downgraded BHP Biliton's credit rating for the second time within a month (January-February 2016) due to its progressive dividend policy.

Write a report to address the following issues:

1. How does credit rating affect an investor's required rate of return? What actions could a firm take to receive a more favourable rating?

2. How reliable do you find rating agencies' ratings in general? Also discuss credit ratings from the point of view of social responsibility.

3. Impact of credit rating downgrading on the value per share of company's stock.

4. At this point in time would you consider buying or selling the BHP stock? Give your reasons.

The report should comprise the following sections:
- Assignment cover sheet
- Executive summary
- Table of contents
- Introduction
- Methodology
- Body (answers to each question)
- Conclusions
- References

The report must:
- be typed using one-and-a half (1.5) spacing left justified.
- use Arial or Times New Roman font size 12.
- display a one inch margin on all sides.
- appropriately cite reference original work, author(s) etc. Citation and referencing must conform to Harvard referencing system.

Reference no: EM131027754

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