--%>

Computing the credit rating

List some of the factors does Standard & Poor’s analyzes in computing the credit rating it assigns a sovereign government?

E

Expert

Verified

While rating the sovereign government, S&P’s analysis centers over examination of degree of economic risk and political risk.  In assessing political risk, S & P computes the stability of the social environment, political system, and international relations with other countries. Factors during examining the economic risk have sovereign’s external financial position, balance of payments flexibility, management of the economy, economic structure and growth, and economic prospects.  Rating which is assigned to a sovereign is mainly important since it typically presents the ceiling for ratings S&P may assign an obligation of an entity domiciled in that particular country.

   Related Questions in Financial Accounting

  • Q : Small talk Define small talk and

    Define small talk and discuss its role in developing the relationship.

  • Q : Meaning of drawing What is the meaning

    What is the meaning of drawing in financial accounting?

  • Q : Calculation of NPV Calculation of NPV:

    Calculation of NPV: Calculation of NPV is done through the same method of discounting as described above. However in this case the rate is predefined for  discounting. It is the cost of overall long term resources, whether debt or equity. This co

  • Q : Eliminating exposure of the currency

    Banks find it essential in order to accommodate their client’s requirements for buying or selling foreign exchange forward, in several instances for the hedging purposes.  How the bank can eliminate the exposure of the currency it has made for itself by acc

  • Q : Article on maintenance policy for plant

    Write an article on the maintenance policy for overall costs and enhancing plant productivity.

  • Q : What are equipment expenses What is

    What is equipment expense or what are equipment expenses?

  • Q : Describe Short Holding Period Describe

    Describe Short Holding Period briefly with suitable example?

  • Q : Explain Return on Equity or ROE Return

    Return on Equity (ROE): The amount of net income returned as a percentage of share-holders equity. The return on equity measures a corporation's profitability by revealing how greatly profit a company produces with the money share-holders encompass in

  • Q : Separately-priced-items strategy

    Problem 1.  The manager of Joe's Menswear has noticed that over the past two holiday seasons their usual sales strategy of marking down prices has not been yielding the boost in revenues that it once did.  JM sell men's suits, dress shirts,

  • Q : Modigliani-Miller equation In

    In Modigliani-Miller equation, why is market value of the levered firm is more than the market value of an equivalent unlevered firm?