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

Price-yield relationship of a callable bond, Price-Yield Relationship of a ...

Price-Yield Relationship of a Callable Bond The price-yield relationship of a non-callable or a non-puttable bond is convex because price and yield are inversely proportional.

Pension reforms, Pension Reforms On January 1, 2004, Pension Funds have...

Pension Reforms On January 1, 2004, Pension Funds have come into force in India. Government servants will have to subscribe to them. The new pension fund system is primarily dr

What was the value of each person investment, Joe and Sam each invested $20...

Joe and Sam each invested $20,000 in the stock market. Joe's investment increased in value by 5% per year for 10 years. Sam's investment decreased in value by 5% for 5 years and th

Explain why the company would probably not issue $1 million, Refer to the B...

Refer to the Bulldog battery company's cash budget in Table 18-7.  Explain why the company would probably not issue $1 million worth of new common stock in January to avoid all sho

Compare diversifiable and nondiversifiable risk, Compare diversifiable and ...

Compare diversifiable and nondiversifiable risk. Which do you believe is more significant to financial managers in business firms? Actually Diversifiable risk can be dealt with b

Explain the various types of l/c, Question 1 Describe briefly the various ...

Question 1 Describe briefly the various terms of payment available to an exporter and importer. Explain any one method in detail Question 2 A documentary letter of credit is

Management of finacial institutions, what are the features of a comprehensi...

what are the features of a comprehensive interest rate risk management programme

Future value, Future V alue The value of an investment is based...

Future V alue The value of an investment is based on the rate of interest paid at set time periods and at some point in the future. Future values incorporate both the i

Trade credit is free credit agree or disagree, Trade credit is free credit....

Trade credit is free credit.  Do you agree or disagree with this statement?  Explain. Trade credit isn't free.  It has a value.  Who bears that cost depends on the conditions o

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