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Worse than that. They sit on hundreds of billions of dollars but still borrow money in the tens of billions thanks to fed's still very low interest rate. If tha
by mtgx 8y ago
Worse than that. They sit on hundreds of billions of dollars but still borrow money in the tens of billions thanks to fed's still very low interest rate. If that's not systemic issue I don't know what is.
- toast0 8y agoSitting on money in foreign accounts and borrowing US dollars to pay dividends was to avoid incuring tax on repatriation. That shouldn't need to happen anymore since taxation on foreign income is no longer deferrable by delaying repatriation. I still expect companies with lots of cash to borrow for some expenses and anyway keep large lines of credit open, but it would be strange to borrow to pay a divident if you already have more than enough cash on hand.