The corporate debt rating of Ford Motor Company is currently

The corporate debt rating of Ford Motor Company is currently considered to be just above high yield. If Standards & Poor\'s (S&P) were to give Ford a double-A rating, what would most likely happen to its stock price? A) Their stock price would most likely become more volatile B) The way negotiations with the United Auto Workers Union have gone in the past, their stock price would most likely go down. C) The stock price would most likely appreciate in value D) Since credit rating s pertain to bonds, the stock price would probably remain flat E) Both A and D above

Solution

Due to change in credit rating there will be more volatility with stock price then the correct asnwer will be option A.