Arduous and expensive plan compared with junk bonds

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Reference no: EM1353119

John and I have been discussing my belief that junk bonds should not be allowed. John asked me to look at it from the issuer's point and I did.

Let's say you and I started a small company several years ago and through our hard work, we have been very successful. We have paid our bills, made a good profit, but are still a medium sized company. We now have a great idea and have proven it to ourselves and our leadership that we are thinking about going the right way.

Now where do we get the $10M from? Starting the process of selling stock is an arduous and expensive plan compared with issuing junk bonds. I had a very difficult time seeing this but John's explanation caused me to get on the Internet and prove him right and me wrong.

Reference no: EM1353119

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