Why Apple took on $17 billion in debt Posted on Thursday, May 2nd, 2013 at 10:47 am. PTWritten by Jim Dalrymple Taxes. JDSoCal Odumba. 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.