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Acquisitions and buybacks are done with after-tax money. (Capex as well, in fact, but depreciation reduces future profits and taxes.)
by kgwgk 7y ago
Acquisitions and buybacks are done with after-tax money. (Capex as well, in fact, but depreciation reduces future profits and taxes.)
- csdreamer7 7y agoBuybacks yes. Acquisitions depend on what is being acquired. Goodwill can be depreciated.
- kgwgk 7y agoGoodwill is not amortized in GAAP accounting for public companies (it can be impaired, but that’s bad). But you’re right, I had forgotten that it may be amortized for tax purposes when it comes from a taxable asset sale (not for an stock-based acquisition).