The role of Junk Bonds in Corporate Finance

Seminar paper from the year 2008 in the subject Business economics - Investment and Finance, grade: 1,3, The FOM University of Applied Sciences, Hamburg, course: Master of Business Administration (MBA), language: English, abstract: Financing the activities of companies is nowadays one of the most important challenges in Corporate Finance. More and more companies and investors use Junk Bonds as a stable part of their financial sourcing activities in Corporate Finance. The use of Junk Bonds is as a source for financing such activities like takeovers, merger and acquisitions, and restructuring instead financing activities by conventional bank credits established. This tool provides benefits and risks to both parties - buyers and issuers. The assignment at hand surveys some information about the role of Junk Bonds in Corporate Finance by focusing on risks and benefits from different perspectives.