Some analysts have suggested that Apple (AAPL 1.26%) should raise debt to address its foreign cash problem. While many investors may see this as counterintuitive, issuing debt could potentially reduce Apple's weighted average cost of capital, or WACC, since debt typically carries lower costs relative to equity. However, the cost of debt is explicit, while the cost of equity is implicit, which makes it a difficult decision to make.
In the video below, Fool contributor Evan Niu, CFA, explains how debt could actually benefit Apple.
