Kraken Robotics V.PNG

Now Kraken Robotics Share Prices Might Take A Beaten

[NLMoose]

With Kraken Robotics about to borrow between $35 and $45 million in spite their large sales and profits at a time when interest rates are high, their move is going to cause more harm to its stock and shareholders.

Even when the after tax cost of new debt will be between 4.5% and 6%, to borrow money at a time when the Bank of Canada interest rate is 5%, and overall itnerest rate is over 7%, is a foolish mistake.

In a Finance contest, when a company borrows money, the debt cost is typically the after tax cost of debt as interest on it is tax deductable.