Discussion

Debt securities such as bonds pay a stated interest rate. This interest rate depends on the risk of investment. In addition, bond prices change when investment risk changes. Standard and Poor’s provide ratings for companies. Stock prices also fluctuate. Fluctuations depend on various factors.

Find an article about a company that has been affected recently by its bond rating or its stock price. Relate the story to what we learned this week about accounting for bonds (liabilities) and stock (stockholders’ equity).

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