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Why do most international bonds have high Moody’s or Standard & Poor’s credit ratings?
Answer: Moody’s Investors Service and Standard & Poor’s offer credit ratings on several international bond issues. It has been noticed that a disproportionate share of international bonds comprise high credit ratings. The facts suggest that a logical reason for this is that the Eurobond market is just accessible to firms which have good credit ratings to begin with.
The director of capital budgeting for a firm has recognized two mutually exclusive projects, A and B, with the following expected net cash flows:
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