ctredit rating

The Wall Street Journal once reported, “Philip Morris Cos., in an aggressive move to boost its stock price, announced a $6 billion stock buyback plan and raised its quarterly dividend nearly 20%. . . . The announcement, which came after a regularly scheduled board meeting, raised the company’s stock to a 52-week high. . . . Separately, rating agencies Standard & Poor’s Rating Group and Moody’s Investors Service Inc. confirmed their ratings on Philip Morris’s debt. While both agencies said Philip Morris is continuing to generate strong cash flow, Moody’s . . . placed Philip Morris at the low end of its current rating level.”
REQUIRED:
Explain how this announcement can increase the stock price of Philip Morris (now known as Altria Group) while at the same time reduce its credit rating.

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