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While true, my point is they were already returning cash to investors in the form of a dividend. Why the need to do outrageously huge buybacks if they were alr
by AznHisoka 7y ago
While true, my point is they were already returning cash to investors in the form of a dividend.
Why the need to do outrageously huge buybacks if they were already doing so?
- ddeck 7y agoBecause buying back shares is typically better for non US investors. I don't live in the US and I am not a US citizen, but if I owned those American Airlines shares, I'd need to pay 30% withholding tax to the US government on that dividend (strictly speaking it's withheld vs. actively paid). That's in addition to taxes that need to paid in one's own country (assuming no dual taxation treaty). With a share buyback, the share price rises (ideally) instead and when it is sold, there's no US tax on the capital gain for non resident non citizens.