SocraticGadfly: Craziness is top companies borrowing money just to pay higher dividends

July 06, 2007

Craziness is top companies borrowing money just to pay higher dividends

But, it’s happening. But:
Even blue-chip companies such as IBM (IBM, news, msgs) are borrowing money to beef up their dividend payouts, and other companies are taking on tons of debt to pay for acquisitions to fund their own purchase by a buyout fund.

In this article, Jim Jubak goes on to explain how collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs) work, and what the subprime crisis means for them.

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