Reference no: EM131572753

1. Navigate to the threaded discussion below and respond to the following prompts:

a. Funding: What are the key differences between using bonds to finance capital projects and issuing stock for that purpose?

b. Ethics Consideration:

i. A major scandal broke in 1996 when allegations were made that Moody’s Investors Service, Inc. was issuing ratings on bonds it had not been hired to rate, in order to pressure issuers to pay for their service.

ii. In a Wall Street Journal story dated May 2, 1996, it was reported that after choosing to use rating services other than Moody’s, officials in Chippewa County, Michigan, received a letter from the executive vice president warning that the “absence of a rating ... might imply that we believe that there exist deficiencies” in the financing arrangements.

iii. Further, Moody’s billed the county anyway, “as part of a long-standing policy.”

iv. Moody’s actions resulted in an antitrust inquiry by the U.S. Justice Department and the departure of several of the firm’s senior management.

c. How do bond investors rely on bond ratings to make their investment decisions? What is unethical in this situation?  

2. Support your position with at least one biblical principle with a specific Bible verse that you feel is relevant to the situation (explain how and why it applies).