| Course | MT480 Corporate Finance |
|---|---|
| Unit | Unit 6 |
| Paper type | Seminar reflection |
| Length | About 810 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT480 Unit 6
Why Borrow With Cash in the Bank? An MT480 Unit 6 Seminar Reflection on Apple's 2013 Bond
[Student Name]
Purdue University Global
MT480: Corporate Finance
Unit 6 Seminar Reflection
[Instructor Name]
[Date]
The classmates and Brandywine Hollow Mushrooms are composite; the Apple facts and the sources cited are real, and the tax figures are the seminar's stylized assumptions.
My First Reaction
When the instructor asked why Apple borrowed $17 billion in 2013, then the largest corporate bond sale on record, while holding well over $100 billion in cash and securities, my answer was that it should not have. Borrowing while sitting on cash looked to me like paying interest for nothing. I said so in the session, with some confidence, and two classmates agreed.
The Fact That Changed the Discussion
The instructor then added one fact. Much of Apple's cash was held by foreign subsidiaries, and under the tax rules of the time, bringing it home to pay dividends or buy back shares would have triggered United States tax on the amount repatriated. The cash existed, but it was not free to use at home.
Using the session's stylized assumptions, we priced the choice. Repatriating $17 billion at an assumed 25 percent incremental tax would have cost about $4.25 billion at once. Borrowing $17 billion at a blended coupon of 2 percent costs $340 million a year in interest, but interest was deductible at a 35 percent rate, so the after-tax cost was about $221 million a year. Dividing the one-time tax by the annual after-tax interest gives about 19.2 years before the borrowing would cost as much as the tax it avoided, even before discounting future interest, which would push the break-even further out.
The cash was real, but bringing it home would have cost almost twenty years of interest in a single payment.
What I Revised
I had treated cash as cash, wherever it sat. The session showed me that the location and tax status of cash can make it far less available than the balance sheet suggests. Foley et al. (2007) found that United States firms facing higher repatriation taxes held more cash abroad, which is the pattern Apple displayed. Once that is understood, borrowing at a low after-tax rate to fund payouts at home is not paying interest for nothing; it is paying a modest annual cost to avoid a large one-time cost.
I also learned something about the logic of capital structure more broadly. Modigliani and Miller (1963) showed that the tax deductibility of interest gives debt a value of its own, and the Apple case is a vivid example: the deduction made the borrowing cheaper, and a different tax made the alternative more expensive. Debt was not chosen in spite of the cash; it was chosen because of how the cash and the debt were taxed.
Where the Classmates Disagreed
Not everyone accepted the tax explanation as the whole story. Rafael argued that Apple also borrowed because rates were near record lows in 2013 and investors would lend to it at almost government rates, so locking in cheap long-term money was attractive whatever the tax position. Lena pointed out that the bond funded share buybacks and dividends that an activist investor had been demanding, so the decision was partly about satisfying shareholders quickly. I think both points add to the tax argument rather than replacing it. Myers (1984) argued that companies reach first for money they already have, then borrow, and issue shares last; for Apple, the internal funds were trapped behind a tax, which moved debt to the front of the line.
The Link to the Grower
The session changed how I read Brandywine Hollow Mushrooms, the composite grower in our case. The grower holds about $38 million of cash and is weighing how to fund a $107.5 million expansion. My instinct before the seminar would have been to spend the cash first. Now I would ask what the cash is for: some of it covers the seasonal gap between winter gas bills and spring revenue, and spending it on the expansion would leave the grower borrowing short-term at a higher rate every winter. Like Apple's foreign cash, the grower's cash has a job, even though the reason is seasonality rather than tax.
What Changed Later
The closing point of the session was that the trade was temporary. The 2017 tax law in the United States imposed a one-time tax on accumulated foreign earnings and largely ended the deferral that made Apple's strategy attractive. After 2017 the company could bring cash home without the large incremental tax, and the reason to borrow while holding cash weakened. That taught me a last lesson: a financing decision that is right under one set of rules can become unnecessary under another, so the reasoning matters more than the decision itself.
References
Foley, C. F., Hartzell, J. C., Titman, S., & Twite, G. (2007). Why do firms hold so much cash? A tax-based explanation. Journal of Financial Economics, 86(3), 579-607. https://doi.org/10.1016/j.jfineco.2006.11.006
Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. The American Economic Review, 53(3), 433-443.
Myers, S. C. (1984). The capital structure puzzle. The Journal of Finance, 39(3), 574-592. https://doi.org/10.1111/j.1540-6261.1984.tb03646.x
Reading the MT 480 Unit 6 instructions
The Unit 6 seminar in MT480 discusses a real financing decision, and the reflection records how your view changed. Start with your first reaction, stated honestly. Then describe the fact or argument that changed the discussion and work through any numbers the session used, labeling stylized assumptions as such. Explain what you revised and why, connecting it to course concepts such as the tax value of debt or the pecking order. Record where classmates disagreed and how you weigh their points. Apply the lesson to the company you have studied all term. Many reflections close by noting how later events, such as a change in law, affected the decision. Two first-person pages cover most prompts, and written-option sections swap the live debate for a posted case.
How this MT480 Unit 6 example is built
The reflection opens with the writer's confident objection in the session. The instructor's added fact about foreign cash follows, and the stylized tax and interest figures are worked into a break-even period, under a highlighted line on twenty years of interest paid at once. A section on what changed cites Foley and colleagues on tax-driven cash abroad and Modigliani and Miller on the value of interest deductions. Classmates' points about low 2013 rates and activist pressure for payouts are weighed and joined to the tax argument through Myers's pecking order. The grower link explains that its $38 million of cash covers the winter gap between gas bills and spring revenue. The close notes that the 2017 tax law largely ended the advantage, and draws the lesson that reasoning outlasts any single financing choice.
Where the points sit in the MT480 Unit 6 rubric
Seminar reflections in finance are marked on how precisely the change of view is explained. Instructors credit an honest first reaction and a clear account of the fact that changed it. Working the session's numbers into a simple comparison, such as a break-even period, shows the student can turn a story into analysis. Labeling assumptions as stylized shows care. Connecting the case to capital structure concepts, such as the tax shield or pecking order, demonstrates integration. Weighing classmates' alternative explanations, rather than ignoring them, is often rewarded. Applying the lesson to the course's company shows transfer. Noting how a later law changed the decision shows awareness that financing choices depend on conditions. First-person writing that stays on the analysis carries the communication marks.
MT480 Unit 6 help from the desk
Weak Unit 6 reflections recount the bond sale and never state the writer's opening view or the moment it shifted. Another frequent problem repeats the session's conclusion without the numbers that supported it. Students often present stylized tax figures as facts. Classmates' disagreements are commonly left out, which makes the reflection read as a summary. Applications to the course company tend to be generic. Before submitting, write your first reaction and your final view as two sentences and check that a reader could see the difference. Then make sure every figure you use is either sourced or labeled as an assumption. Finally, find one way the case applies to your course company that depends on the specific lesson you learned, not just on the general idea that debt can be useful.
Get an MT480 Unit 6 example written to your instructions
Tell us which company your Unit 6 seminar examined and the financing choice it weighed, or attach your section's written alternative, plus the rubric. Written around that session, the reflection moves from a stated belief through the evidence that shifted it to a classmate's objection. We charge nothing for the first custom sample, and it tends to reach you in 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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MT480 Unit 6 questions, answered
Are the tax and coupon figures Apple's actual numbers?
No, and the reflection is explicit about it. The session used round assumptions to make the trade-off visible: a 25 percent incremental tax on cash brought home and a 2 percent blended coupon. The reported facts are the date, the 17 billion dollar size and the purpose of the borrowing. A reflection built on a class calculation should label it that way rather than presenting it as company data.
What if my seminar discussed a different company?
The structure transfers directly. Whether the session weighed a buyback funded with new debt, a convertible note or an equity raise, the reflection still moves from prior belief to the facts of the deal, then to the arithmetic, an objection and a revised view. The custom version uses your session's company and figures, labeled as either reported or assumed.
How personal should the reflection be?
Enough of the writer to make the shift in view believable, and no more. Only one brief paragraph in the sample concerns the household rule behind the writer's first reaction; the case and the course concepts fill the rest. Most rubrics reward that ratio: a clear starting belief, then evidence, then a revised position a reader could apply elsewhere.
Where can I find a free MT480 Unit 6 sample paper?
The complete MT480 Unit 6 reflection is on this page, examining why Apple borrowed $17 billion in 2013 while holding large cash balances abroad.
How long would the borrowing take to break even in the MT480 Unit 6 sample?
About 19.2 years before discounting, comparing $4.25 billion of repatriation tax with about $221 million a year of after-tax interest.