Why do analysts of high-yield corporate bonds feel that the analysis should be viewed from an equity analyst's perspective?
What will be an ideal response?
For high-yield bonds, the analysis of business risk, corporate governance risk, and financial risk all involve the same type of analysis that a common stock analyst would undertake. Thus, many fixed income portfolio managers strongly believe that corporate bond analysis, particularly
high-yield bond analysis, should be viewed from an equity analyst's perspective. Using an equity approach, especially for high yield debt, can be used to verify the findings of traditional credit analysis. If analysts think about whether they would want to buy a particular high yield company's stock and what will happen to the future equity value of that company, they have a useful approach because, as equity values go up, so does the equity cushion beneath the company's debt.
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Which of these three characteristics (I, II, and III) are required in order for a promised good or service to be considered distinct? Commercial substance Distinct within the context of the contract Capable of being distinct
A) I and II only B) I and III only C) II and III only D) I, II, and III
Which of the following bank reconciliation items would result in a journal entry?
A) Checks outstanding B) An adjustment for a check recorded for the wrong amount C) Deposits in transit D) A bank error on the bank statement
Lean supply chain management focuses on eliminating waste:
A) in a firm's sourcing and logistics activities. B) within a firm's internal operations. C) in flows of information and money among supply chain partners. D) in all of the above areas.
Which of the following could be considered a secondary boycott?
A. A union encourages consumers not to purchase from Walmart because it sells products that are produced by a company that they are currently striking. B. A union refuses to work on a job site where nonunion labor is also working. C. A union encourages its members not to purchase from Walmart because Walmart uses nonunion labor. D. A union encourages consumers not to purchase from Walmart because Walmart uses nonunion labor.