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To break up the estate was certain to involve considerable loss in values. Seeing this situation, a young business man of ability and good standing in the community secured from .the heirs an option to purchase the whole estate for $1,500,000. A record of earnings during the preceding five years showed an average of approximately $120,000. It was stated, however, that the estate had been loosely managed and that by the use of modern business methods it could be made to yield an annual profit of at least $300,000. It was estimated that about $500,000 cash would be needed in order to modernize the plants and to provide ample working capital. The promoter wished, if possible, to bring out a bond issue of $1,500,000 and was himself prepared to raise the additional $500,000 required by the sale of common stock. After presentation of this proposition to a number of bond houses, the following summary of their objections was drawn up: 1. The earnings for the past five years are neither sufficiently large to be attractive to a clientele of small investors, nor to guarantee unbroken interest payments on the bonded indebtedness proposed. In other words, if your outstanding bond issue is guaranteed to yield 6%, on the showing made by the property for the last five years, you have too narrow a margin. The property should be made to yield earnings at least twice the amount of the fixed charges before the proposition would be in shape....