How does debt add value to CPK?
By moderately levering up and repurchasing shares, companies can normally increase their EPS because of the interest tax shield. This typically makes the cost of issuing debt cheaper, than that of issuing equity. The interest tax shield will reduce taxable income so that when debt is used to repurchase shares outstanding, there will be a subsequent increase in EPS. A similar effect happens with ROE. Because less of the company is being financed with equity, earnings are spread out over less equity and therefore increase ROE.