Discuss about the bond-rating agency

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Question: Good Faith Hospital needs to sell bonds to finance major renovations and purchases of modern equipment. The hospital recently experienced difficulties, however, and its operating margin for the past 3 years fell below the median operating margin for hospitals of similar size. The hospital is preparing its financial statements, and preliminary indications are that its operating margin will continue its downward slide. The CFO is concerned that the bond-rating agency will lower the hospital's bond rating, resulting in an increase in the interest rate on the new bonds.

Reference no: EM131708667

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