Holdean Property Development Ltd

Holdean Property Development Ltd. has been downgraded to a BB rating (below investment grade) by the major debt rating agencies. What is the immediate consequence of the reclassification?

A) The company's shareholders are demanding a higher dividend payout.
B) Current bond holders are experiencing a decline in the value of the company's bonds.
C) Current bond holders are requiring and receiving a higher coupon payment on the company's bonds.
D) Holdean Property Development Ltd. has a higher weighted average cost of capital.
E) Banks and financial institutions are legally empowered to step in and restructure Holdean's debt.

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