“Apple, which has $100bn worth of offshore cash compared with just $45bn in the US, last month announced it would partly fund a record-breaking $55bn share buyback programme by using money raised in the corporate bond market,” Stothard reports. “The company will also save around $100m a year from using the debt rather than straight cash. Although the company’s $17bn borrowing from the corporate bond market this week will cost it around $310m a year in interest payments, it will regain about a third of that due to tax deductions.”
Stothard reports, “Gerald Granovsky, an analyst at Moody’s, said: “If you assume the statutory 35 per cent corporate tax rate, based on the data available and on a back of the envelope calculation, to generate in the US the equivalent of $17bn the company would need to repatriate $26bn. ‘That is less attractive than paying the $300m in interest attached to this bond sale,’ he added.”
Read more in the full article here.
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Tagged: AAPL, Apple buybacks, Apple dividends, repatriation holiday, tax repatriation, U.S. taxes
