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It's been a while, but iirc you increase leverage of a company (by putting the company in debt) to be able to deduct taxes using tax shields on the interest. I
by maxboone 3y ago
It's been a while, but iirc you increase leverage of a company (by putting the company in debt) to be able to deduct taxes using tax shields on the interest.
Infamous example are leveraged buyouts, i.e. finance the takeover of a company by putting the company in debt. I think Twitter was an LBO.
- tibbydudeza 3y agoRepayment of the loans of a billion USD per year afaik.
- smcl 3y agoWell it kind of demonstrates the problem here. They've taken on an enormous amount of debt, slashed essential maintenance and paid out a ridiculous amount of dividends. To be able to do this prices have skyrocketed across the board. What you're describing just sounds like a clever little tax dodge - to shuffle things around so that you can do a bit more with less for a period. But what consumers are actually seeing is a decline in service for an increase in prices, that's the opposite.