buy back shares using debt

When do companies buy back shares using debt?

While companies would normally buy back shares using cash balances, which effectively recreates a dividend payment for investors, it is also possible for a company to use debt financing to improve its capital structure. However, because of the way in which such a transaction would impact the balance sheet much more aggressively, we need to be able to understand the full impacts of such a transaction before we can decide if the net impact will be beneficial to our investment positions.

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