With A Networth Of Around $23 Billion Based On His Over 50% shares In His Company, Which Means The Company Is Worth Well Over $40 Billion.

It Was In The News Not quite Long Ago That He Approached Banks For Loan To Build His Rifenery And Now He Just Borrowed To $2 Billion From A Chinese Bank To Build More Cement Pl Company Can't Budget $2 Billion From Its Revenue To Fund The Project And Not Have Get A Loan Which Would Incure Interest No Matter How Little Would be Over $100 million.

Business Expert In The House Please Help Do Justice To This.

Most businesses borrow money, even the successful ones, its a very common business practice.

ibotjaycob:
Most businesses borrow money, even the successful ones, its a very common business practice.

I know, but why when its very obvious they have the financial muscle.

nairamaverick:


I know, but why when its very obvious they have the financial muscle.

Most corporate giants are saving money right now, from apple to coca cola, these are institutions that are traditionally known to invest in the economy with their products, but since the world economy is declining, rather than spending right now the safe thing to do if you want to fund a project is to borrow.

ibotjaycob:


Most corporate giants are saving money right now, from apple to coca cola, these are institutions that are traditionally known to invest in the economy with their products, but since the world economy is declining, rather than spending right now the safe thing to do if you want to fund a project is to borrow.

Thanks

In 2013 Apple issued around $17 billion in bonds. What this means in simple terms is that Apple is borrowing billions of dollars, and paying out a small yield to the people and institutions that purchase the bonds Apple is offering.
This, of course, is the same tech company that is sitting on almost $150 billion in cash. So why would Apple borrow the money, when it already has so much of it sloshing around?

But as the simple math indicates, the reason for Apple borrowing is because the cost of borrowing money is so cheap. PAYING INTEREST ON DEBT REDUCES YOUR TAX BURDEN. Google, mocrosoft both of these financial giants have done the same in recent years