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Your CFO says that your company's bond is not risk free as they are subject...

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Finance

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Your CFO says that your company's bond is not risk free as they are subject to default risk. Therefore, you need to adjust for credit risk in computing the cost of capital. It looks like you may not be able to take this Friday off. 3. (2 marks) Visit the corporate website and find the credit rating of your company. Your company might not have any credit ratings when the company does not issue any bonds. However, it does not mean that the company has no credit risk. If the company has any debt, the company has credit risk. If you cannot find any ratings, look for similar firms in the same industry that have the ratings. Please report if this is the case.' If you cannot find any ratings information, you may look for some qualitative information that may provide some idea about the credit risk of the firm/sector

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