Why Apple borrows $ 14 billion when it’s sitting on a $ 200 billion pile of cash

If you look at Apple’s $ 14 billion loan interest rates earlier this month, it becomes immediately obvious why the company went to the debt market to raise money to buy back stock rather than tap into its $ 200 billion. about cash and negotiable securities.

It’s because the interest rate on Apple’s new debt is incredibly low. Especially on the $ 2.5 billion in five-year notes, which carries a lower after-tax interest cost for Apple than the after-tax cost of the cash dividend it pays to its common shareholders.

Sounds incredible, right? But let me show you the numbers and you’ll see it’s true.

Apple’s $ 2.5 billion five-year interest rate …

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