KIC000064 - Industry & Soft Factors Rating Agencies put...

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Industry Soft Factors Rating Agencies put a large weight on factors that are hard to measure or require some "expert" judgment. These factors can be included in a model, but the more subjective the factor the worse off you are. The type of industry and market share within an industry can clearly make a difference in risk {regulated vs unregulated, monopoly, duopoly) Other factors that could make a difference: - # of independent board members - CEO track record - Measure of corporate control - Number of prior accounting irregularities (re-statements) Example Scorecard Bre,e f.ct.o, NarrawFoctor ~" Brood N.rco"" ((1-1001 Weillh' Welgm FinondolR,tio, lJqui<fity n ,~ l.eYefilKe " "" ,~ Inl,,,,$'1 (o"",.g. ~ '" Level or Gro. ....h ,. "' n G'O\IithoISoI~ " '" ~ In.u<try Indu~Qu.lfty as ,~ Ranlinlndustry is ,~ ,~ SoftF.ctor:s Management ., ,~ Quality '" Reillbilityof " " Financial numbt!" M.oro GDPGrowlh zz ,. Sp~.
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This note was uploaded on 09/06/2011 for the course FIN 428 taught by Professor Hood during the Fall '11 term at Iowa State.

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KIC000064 - Industry &amp; Soft Factors Rating Agencies put...

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