No, the argument is that debt-financing at times is simply cheaper than equity financing. Equity carries more risk, because stockholder are paid after bondhold

No, the argument is that debt-financing at times is simply cheaper than equity financing. Equity carries more risk, because stockholder are paid after bondholder in the event of bankruptcy. Therefore, equity investors (stockholders) demand higher returns than lenders. Depending on a few other factors, borrowing is the better option to raise operational capital than issuing stock. Conversely, when your need for capital decreases, you no longer want to pay for it. And just as you may repay a loan (early) in that case (if you are debt-financed), you may buy back shares, if you are financed by equity.