In 2013, Apple Inc. sold $17 billion of bonds in the biggest corporate offering on record as the iPhone maker seeks to help finance a $100 billion capital reward for shareholders. This financial policy changed Apples capital structure significantly. The leverage ratio of Apple increased after the buyback of common stocks and the issuance of long-term bonds. Repurchase is a way to give it back to shareholders. It is especially the case for Apple as the company has been piling up cash and now shows signs of a slowdown in innovation and growth.

There are several ways a firm could give back to loyal shareholders. Companies could reward shareholders by paying dividends, using existing cash to buy back shares, granting preferred stocks to existing shareholders, or issuing bonds to buy back shares.

1. What is the potential impact of the policy on Apples capital structure? Discuss Apples financial positions, profitability and risk by analyzing the commitment of cash payment, the tax liabilities, the risk of financial distress, and the growth opportunities.