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Thread: Politics Thread

  1. #2371
    Sophomore Caf's Avatar
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    Quote Originally Posted by ArizonaXUGrad View Post
    My extremely intelligent father, aeronautical engineer and well versed in economics, believed that Corporations would reinvest back into itself with their newfound tax break. What I could not figure out was that he knew what happened last time Bush allowed the repatriation of foreign held funds. He knew a lion share when to the purchase of treasury stock but insisted this one would be different. I just laughed at him.
    Is he versed in accounting and corporate finance? People gas-lighting over this are a bit misinformed. These companies are repatriating retained earnings. Even after the repatriation tax holiday it still makes more sense to fund investment with debt in this environment. 8% and 15.5% tax are lower but still significantly higher than the 2-5% rates companies like Apple can get on bonds. I would much rather see earnings given to investors in the form of dividends, but I'm not going to fault a corporation for lowering their cost of capital right before the interest rate party is over.

  2. #2372

    Politics Thread

    Quote Originally Posted by Caf View Post
    Is he versed in accounting and corporate finance? People gas-lighting over this are a bit misinformed. These companies are repatriating retained earnings. Even after the repatriation tax holiday it still makes more sense to fund investment with debt in this environment. 8% and 15.5% tax are lower but still significantly higher than the 2-5% rates companies like Apple can get on bonds. I would much rather see earnings given to investors in the form of dividends, but I'm not going to fault a corporation for lowering their cost of capital right before the interest rate party is over.
    He has the benefit of me being a corporate accountant at a public company. Those things you mention donít help the employee one bit.

    Edit to toss in that in my years, I have yet to see a company ever pay off big debt. Itís always refinanced for a new rate. I am class of Ď98 so I have a few years into this.


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    Last edited by ArizonaXUGrad; Yesterday at 09:30 AM.

  3. #2373
    Sophomore Caf's Avatar
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    Quote Originally Posted by ArizonaXUGrad View Post
    He has the benefit of me being a corporate accountant at a public company. Those things you mention don’t help the employee one bit.

    Edit to toss in that in my years, I have yet to see a company ever pay off big debt. It’s always refinanced for a new rate. I am class of ‘98 so I have a few years into this.


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    When did I say or imply that it directly helps the employee? There are practically zero instances of a company using retained earnings to benefit employees over shareholders. Wages are strictly functions of the labor market. No company is going to pay more just because they had strong earnings.

  4. #2374
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    Quote Originally Posted by ArizonaXUGrad View Post
    I am class of ‘98 so I have a few years into this.
    Class of '98 accounting (and finance) grads rule.

  5. #2375
    Quote Originally Posted by Caf View Post
    When did I say or imply that it directly helps the employee? There are practically zero instances of a company using retained earnings to benefit employees over shareholders. Wages are strictly functions of the labor market. No company is going to pay more just because they had strong earnings.
    This, however, is going to be the number one thing that causes the next recession. Well, combined with ever increasing inflation will lead individuals and families with a decreasing ability to pay for necessities in their life.

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