Youve owned a tool and die company for the last five years. Even during the recession, you have been earning a net profit of 30% on your investment and have been able to pay yourself a reasonable salary. You are feeling so confident that you are considering expanding. You believe that your profit potential can improve greatly if you could expand your product line with newer high-tech equipment. You estimate that you will need $1,000,000 for the expansion.

What are your financing alternatives?

Would you consider selling bonds if you had to pay 12% interest?

What are the major advantages of using issuing bonds?

What are the major disadvantages of using issuing bonds?