For Toyota, Cheap Money Has a Cost

In finance, one way to make a project work if its cash flows don't look so good is to reduce the discount rate. The less a company pays for money, the easier it is to invest in things that will make that firm more valuable. Of course, those investments could also turn out to be duds. That's something Toyota shareholders should bear in mind after the carmaker raised 20 billion yen ($187 million) selling three-year bonds at a 0.001 percent coupon. At that price, even the most outlandish proposals may start looking good.

Toyota's coupon is the lowest ever for a Japanese company not backed by the government. And it already has a world-beating six fixed-rate securities with coupons equal to or less than 0.1 percent, according to data compiled by Bloomberg.