- The following statements have no basis. I was asked to write a brief essay answering "Explain why does a firm that issues bonds in the stock market has in general access to better interest rates when they borrow money, compared to firms of the same size that are not in the stock market." I do not know if this is true or not, but I just want you to correct my English.
Appearing in the stock market is a great moment for many firms. This means that they can receive inversions more easily, because stock market investors can now see them and decide whether or not the company is worth the risk of investing.
When a company finally gets inversions, it has to be held accountable for their actions to the investors. If investors do not like how the firm is managing itself, they can freely say that they will withdraw their inversions, meaning the executive team of the company has to strive to keep investors satisfied, both for keeping and attracting future inversions that could foster the firm's growth.
On the whole, this means that companies that issue bonds in the stock market are more trustworthy, as the leaders are not the only ones who get a say in how the company should go. Banks, just like investors, have to compare the possible profits with the possible risks that lending money to a company presents.
On account of the reasons explained above, banks are more willing to lend money with better interest rates to companies in the stock market, because they expect that the risk is lower compared to just any other company of the same size that does not appear there.