4 ms·
Shareholders' funds?
by hgomersall 3y ago
Shareholders' funds?
- johngladtj 3y agoWhy should shareholders put up those funds, and where do they get them from if not the running business? Do you expect that shareholders should run a permanent loss on the business?
- hgomersall 3y agoI haven't read the proposed legislation but I expect in practical terms it means such expenditure can't be treated as a business expenditure for tax purposes but still impacts the balance sheet. Whether or not that's good or bad I have no opinion.
- miguelazo 3y agoI seriously doubt those expenses would result in a permanent (or even a single year's) loss under that scenario.
- prepend 3y agoWhat are shareholder funds? Are you saying that there would be a capital call to shareholders to pay operating expenses? I’m not sure I understand this term as related to how corporations pay expenses.
- willcipriano 3y agoShareholders get paid dividends right? Have a firm loan the utility the costs and recover them from the dividend payments.
- prepend 3y agoDividends come out of profits and profits come out of revenue. “Recovering from the dividend” is just another way of saying you are using revenues to pay for something. Paying a dividend out and then taking part back is not only inefficient but would still violate any prohibition to spend revenue on something. If you wanted to do this, it’s just the same as reducing the dividend by some amount and the paying that amount out to a different expense. Also, dividends are post tax so this is super inefficient in that you wouldn’t be able to deduct the expense if wanted to pay out as dividend and then have shareholders pay the expense.