re: Considerations before purchasing a small business?

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Increasing eps is not increasing earnings (what you claimed). You were wrong.

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He clearly meant earnings per share. You two are arguing over semantics and a misinterpretation there

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And how will they pay back those loans? Please explain to me how it isn't with cash.

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When a company buys back those high dividend shares, they essentially get to keep the dividend/are paying themselves the dividend however you watn to think about it.

So for example, if you took out a loan that you have to pay back at a 3% interest rate and you have dividends at around 4%, you are paying back all the interest with dividends that you saved by buying back from stockholders (since those dividends are staying with the company not leaving for stockholders) and you also have 1% left over to pay back the principle.


Essentially PM is pocketing that difference in yield and interest in the long run as they get to hold the value of the stock and are not losing money to interest