Credit Rating in Transfer Pricing Analyses
Determining the credit quality of the borrower is a crucial step in preparing a reliable analysis to benchmark the arm's length interest rate for intercompany financial transactions...
Measuring yields for bonds
As a general statement, the price of any financial instrument is defined as the present value of the expected cash flows from that financial instrument. In the case of bonds, there are two main components that determine the price...
The Z-Score Model: A Useful Tool for Intercompany Financial Transactions
One of the biggest challenges in pricing intercompany financial transactions is getting an accurate credit rating analysis of the borrower entity. Credit rating is a key factor that impacts interest rates. However, most subsidiary entities that borrow from affiliates under common control do not have their own standalone credit ratings, creating a challenge for transfer pricing analysis...