How credit rating affect investor required rate of return

Reference no: EM131097249 , Length: word count:1250

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 down grading 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 confirm to Harvard referencing system.

Reference no: EM131097249

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