Types of rating - shadow rating, Financial Management

Assignment Help:

The issuer will not have to disclose the rating to the public.

The firm can, either independently or with the help of its investment banker, assess its shadow rating by proceeding in the following manner:

  1. After collecting the relevant information, various financial ratios used by rating agencies can be computed.

  2. Companies with similar projects having published ratings are identified. The financial ratios of these companies can be used for comparison.

  3. Apart from these financial ratios, the management quality, performance of parent/group companies are also assessed.

  4. More weightage is given to those factors/information that have a major impact on the performance of the company. Based on this also the strengths and limitations of the firm are identified.

  5. The ratings of the industry averages, and other companies with similar projects may be used and assigned as indicative rating.

  6. To this indicative rating, the sovereign limitations may be applied to get the final indicative rating. This rating should preferably be in the form of a range and not be specfic.


Related Discussions:- Types of rating - shadow rating

Advantages and disadvantages of investing in gilts, Advantages and Disadvan...

Advantages and Disadvantages of Investing in Gilts Advantages As the security is issued by the GOI, it has a minimal default risk. Investors have the opportunity to inves

Valuing a callable bond using binomial model, The process of va...

The process of valuing a callable bond is similar to that of an option-free bond, except for one thing - when the call option may be exercised b

State the term- dividend cover, Dividend cover Dividend cover = Profit ...

Dividend cover Dividend cover = Profit available to ordinary shareholders (PAT) / Annual dividend(no. of times) Or =    EPS/Dividend per share Dividend cover shows safety

Explaqin advantage of any available cash discounts, Assume that you have be...

Assume that you have been consistently impressed by David and Tom Gardner of The Motley Fool since you first heard of their rather improbable rise to prominence in financial circ

Define interbank currency trading worldwide use us dollar, Why does most in...

Why does most interbank currency trading worldwide involve the U.S. dollar? Answer:  Trading in currencies worldwide is in opposition to a common currency which has international

Loan schedules - fixed vs floating, Consider a mortgage example to nance ...

Consider a mortgage example to nance the purchase of a house or flat. You may use a real example or create a ctitious one. Search for di erent types of mortgages currently on o e

Financial communications, Financial Communications Also known as inves...

Financial Communications Also known as investor or shareholder relations, this corporate communication sub function moves against from the traditional handling of the finan

Step-up (step down) notes, These types of securities have more ...

These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For

Interpretations of profitability ratio''s, Interpretations of Profitability...

Interpretations of Profitability Ratio's - ROA:       ROA or the Return on Assets ratio is the ratio of net profit to total assets and this ratio indicates whether total assets

Evaluate the vulnerability, Assume you are a professional financial analyst...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd