Jim, you've made a bunch of mistakes, but let's focus on the biggest one first. When you buy a plant you expect to make money on it. You don't just borrow for the hell of it. So, you need to account for incremental income.
Second, debt is quite cheap right now. Certainly cheaper than equity.
Third, if the debt is at 8.5%, then the interest for the quarter will be a little less than $6MM (you've got the quarter's interest equal to
the annual interest).
Finally, the debt would not impact this quarter, but next quarter (the debt has not been issued yet).
BTW, I've heard through the grapevine that Dell is building a South American Plant.
Your errors aside, the reason that this is bullish is that in spite of the "tepid" market for computers that many analysts have been discussing, Dell's demand is apparently sufficient to have them expanding now. Consider, also, where these plants are going in -- China, Ireland and South America. Surely you are seeing a pattern emerge here.
TTFN,
CTC |
