Apple, one of the most valuable companies in the world, plans to borrow billions to fund share buybacks. The company’s decision comes at a time when U.S. tax reform allows Apple to bring profits from foreign subsidiaries back to the U.S.
The company is expected to spend up to $300 billion on share buybacks and dividend payments in the coming years. Apple’s plan to borrow billions to fund this spending will spark discussions about the company’s debt levels.
Apple has done share buybacks in the past to increase the value of its stock. The decision to borrow billions to fund future share buybacks illustrates Apple’s confidence in the company’s future and its ability to generate profits.
Some experts argue that Apple should be cautious about taking on debt in times of economic uncertainty and increasing competition. Others, however, see this as an opportunity for Apple to reshape its capital structure and strengthen its competitiveness in the fast-moving technology industry.
Apple borrows billions for share buybacks
Financing stock buybacks is a common practice for many companies. Apple is now also resorting to this mechanism by borrowing billions to buy back its own shares. This is expected to increase the share price and reward shareholders for their investment.
Apple has been active in the buyback market for some time and has already invested several billion US dollars in buying back its own shares over the past few years. This new funding will allow the company to further expand its share buybacks and reward its shareholders even more.
However, share buybacks can also be a subject of critical debate. This is because companies are investing a lot of money in buying back their own stock, rather than investing it in research and development or other business-critical costs. This could put the company’s long-term growth at risk.
