Why Apple Is Returning to the Debt Market

The video discusses a company's strategy to sell debt in multiple parts to finance share buybacks, primarily due to the high percentage of cash held offshore, which would incur a significant tax if repatriated. The company benefits from cheap debt to fund buybacks while maintaining cash flow for US operations like R&D and marketing. The timing of debt offerings typically follows earnings announcements, and previous offerings have seen high market demand.

Why is the company opting to sell debt instead of using its cash reserves for share buybacks?

• They want to avoid a high tax on repatriating offshore cash.

• They have no cash reserves available.

• Debt is more expensive than using cash.

• They want to increase their debt-to-equity ratio.

What is the primary use of the company's US cash flow?

• To fund international expansion.

• To pay off existing debt.

• To support operations like R&D and marketing.

• To invest in new technologies.

When does the company typically announce its debt offerings?

• During the holiday season.

• Before announcing earnings.

• After announcing earnings.

• At the start of the fiscal year.

What was the market response to the company's previous debt offerings?

• They were oversubscribed.

• They were canceled.

• They were undersubscribed.

• They met the exact target.

What is the expected demand for the company's current debt offering?

• Moderate, with some interest.

• High, similar to previous offerings.

• Uncertain, as no data is available.

• Low, due to market saturation.