Through this discussion we will reflect back and discuss agency costs. Companies pay rating agencies such as Moody’s and S&P to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated; doing so is strictly voluntary. Prior to participating in the discussion be certain you have:
Then share your perspective on the following:
Why do you think they do it?
Why are junk bonds often not rated?
Can you think of any conflict of interest concerning rating agencies?