Industry Newscapital structurestock buybacksalesforcedebt financing
Salesforce Issues Debt To Fund Buyback
7.1
Salesforce this week executed initial steps of a debt-funded $25 billion accelerated stock buyback, part of a $50 billion repurchase authorization approved in February. Management says the move lowers the company's weighted average cost of capital—debt yields about 6.7% pre-tax (roughly 5.3% post-tax) versus a roughly 9.27% cost of equity—boosting EPS but prompting an S&P downgrade.
Key Points
- 1Executed initial steps of $25 billion accelerated buyback, half of a $50 billion February authorization
- 2Lowered weighted average cost of capital because new debt yields (~6.7% pre-tax, ~5.3% post-tax) below 9.27% equity
- 3Increased leverage boosts EPS but triggered S&P rating downgrade, raising future borrowing costs and risk
Scoring Rationale
Official corporate action with clear financial analysis; limited by company-specific scope and moderate novelty.
Sources
Public references used for this report.
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