Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 217.53

+1.5%

Nov 28 9:30 AM EST

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To: dougSF30 who wrote (185590)	1/28/2006 3:45:11 PM
From: Dinesh	Read Replies (3) of 275872

Corporations having debt and paying interest is not unusual. If it doesn't raise the degree of financial leverage too high, it is the cheaper form of financing. IMHO a company would try to clean up its balance sheet this way if (a) it's expecting interest costs to beat rate of return on invested capital, or (b) it needs a prettier balance sheet for some other reason. The economic merits of retiring high coupon debt because the rates are going down (or up) have been questioned. Whichever way you believed, it wouldn't make sense to do so when the rates are heading up. Of the two reasons, (a) did not make intuitive sense, which led to me speculate on (b). regards -d

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