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by jfengel
1925 days ago
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Private companies face a higher cost of capital than equivalent public companies Why is that? (Sorry, I never took finance 101.) Is it because public companies can more easily put up corporate ownership as collateral for the loan? Or because of the extra scrutiny they get from the SEC? |
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It's because junk debt bonds are much cheaper interest rate wise for rapidly growing public companies as the growth means they are less risky.