What is a credit rating game model? What does the credit rating game model imply about the quality of credit rating?
Question 1 a)Explain the three theories of cash holdings including: trade-off theory,pecking ordertheory and agency conflicttheory. (30 marks)b)Based on the empirical evidence in Faulkender and Wang (2006) andDittmar and Mahrt-Smith (2007), discuss the relationship between the value of cash holdings andcorporate characteristics, including corporate leverage, cash reserves, financial constraintsand the quality of corporate governance.(70 marks)Total: […]