 |
 |
 |
 |
 |
 |
 |
The Business Case for Preparedness
Lower Cost of Capital (Debt & Equity)
January 1, 2006 1:01 AM
As businesses operating in an uncertain global environment face increasing operational risks, their capacity to manage these risks becomes an increasingly important component of their financial condition. In assuring the continuation and/or minimal disruption of core business operations, corporate preparedness programs essentially support the business's capability to repay its debts and provide returns to its stockholders.
In the interest of enabling more informed investment decisions, rating agencies are increasingly considering a greater emphasis on the assessment of corporate preparedness in the credit rating process.
Similarly, equity investors may logically look to corporate preparedness efforts as providing greater assurance of the revenue streams which support their investment returns.