A low bond rating during a bad economic time means that the company will have to issue new bonds at a higher rate.

Question

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A low bond rating indicates that a company may have a higher risk of defaulting on its debt obligations, which can result in investors demanding a higher yield or interest rate to compensate for the increased risk. Therefore, if the company needs to issue new bonds during a bad economic time, it may have to offer a higher interest rate to attract investors, which increases the cost of borrowing for the company.

A Low Bond Rating During a Bad Economic Time Means