de Oliveira, N.A.; Basso, L.F.C. The Impact of Value Creation (Tobin’s Q), Total Shareholder Return (TSR), and Survival (Altman’s Z) on Credit Ratings. Int. J. Financial Stud.2024, 12, 44.
de Oliveira, N.A.; Basso, L.F.C. The Impact of Value Creation (Tobin’s Q), Total Shareholder Return (TSR), and Survival (Altman’s Z) on Credit Ratings. Int. J. Financial Stud. 2024, 12, 44.
de Oliveira, N.A.; Basso, L.F.C. The Impact of Value Creation (Tobin’s Q), Total Shareholder Return (TSR), and Survival (Altman’s Z) on Credit Ratings. Int. J. Financial Stud.2024, 12, 44.
de Oliveira, N.A.; Basso, L.F.C. The Impact of Value Creation (Tobin’s Q), Total Shareholder Return (TSR), and Survival (Altman’s Z) on Credit Ratings. Int. J. Financial Stud. 2024, 12, 44.
Abstract
The research explores the impact of financial indicators on the credit ratings of companies listed on the S&P 500, employing a Sys-GMM Model to address endogeneity concerns. The study investigated three independent variables categorized as market and survival factors alongside with seven control variables sourced from leverage, liquidity, interest coverage, profitability, market, survival, and macroeconomic domains. The sample comprised 2398 observations from Capital IQ Pro, spanning nine years (2013 to 2021) and encompassing 240 public companies. The findings suggest that neither Tobin's Q (TQ) and Total Shareholder Return (TSR) lack significant correlations with credit ratings, implying that stock market performance and total shareholder return do not directly impact credit ratings. In contrast, the Altman Z-score (AZS) emerged as a significant predictor, indicating its importance in assessing credit risk. These insights enhance understanding of financial indicators' impact on credit ratings, aiding financial institutions and companies in prudent lending and financing decisions.
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
