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Intel Corporation Message Board

  • wallisweaver wallisweaver Dec 10, 2012 1:55 PM Flag

    Intel Borrows Big, Saves Big

    Intel (NASDAQ: INTC ) led the billion-dollar borrowers brigade with $6 billion spread over five-, 10-, 20-, and 30-year paper. The money's being used to fund a share buyback. Borrowing to buy shares may not seem like a smart move at first glance, but let's crunch some numbers.

    Interest on the new debt: about $143 million per year
    Dividend payout on $6 billion of Intel stock: about $268 million per year.
    This deal nets Intel about $125 million a year in cash flow. Factor in taxes and consider future dividend increases, and the savings will get even bigger.

    ***

    Intel Borrowing Big - Smart
    Intel Saving Big - Smarter
    Shorts Giving Back All Their Gains - Priceless

    Sentiment: Strong Buy

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