If Standard & Poor's ratings of a firm's bonds is below BBB, the _____.
A. firm will find it difficult to find potential investors when issuing new bonds
B. default risk premium associated with the bonds will be less than the risk premium associated with bonds rated AAA
C. firm will easily find investors when issuing new bonds because bonds with high yields have no risk associated with them
D. default risk associated with the bonds is less than that of bonds that are rated AAA
E. firm will immediately have to exercise the call provision and issue new bonds
Answer: A
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