Why Apple took on $17 billion in debt


  • JDSoCal


  • samdchuck

    I have had at least three articles a day explaining this since they announced it.

  • Ron Miller

    Another reason they did it is because they can. The interest on the bonds are a tax deductible expense, and issuing bonds to buy back shares actually saves Apple money. The effective cost to Apple of the bonds is about 1.75% or so after the tax break. At the current stock price, Apple pays about 2.78% in dividends. Buy borrowing money at a lower rate and then buying back shares, Apple actually saves money without having to dip into its cash hoard.

  • Steve Cotner

    Taxes and interest rates. No need to oversimplify!

  • wetterman00

    Ron makes a good point. Continuing his thread a little bit longer. If you can invest in AAPL by borrowing at 1.75% with very long term maturities, you ought to expect the return on that equity investment will FAR outweigh the cost. Great investment.