How a buy back works and stock dilution. We know that a tax credit eventually becomes a debt to the shareholders and a dividend payout too the common shareholder.
A share buy back is when debt is paid and the collateral is returned along with the tax credit that has been bought by the common share holder. To dilute the tax credit it is sold leveraging the shareholders tax debt position.
If a private company wants to sell an assets he wants the most return for his investor so to do that he passes the tax debt on to the public markets by the common shares or by an ADR. An ADR is a foreign tax credit. A foreign tax credit can be converted and diluted by sovereignty debt of the jurisdiction of the registered company. There is a reason that foreign tax debt sold must have sovereignty debt as collateral but I’m not going to get into that at the moment.
I hope the tutorials have been beneficial but like any subject found on a blog site you want to do your own DD on its accuracy of information. We have made available should you want to go back approximately five years in our posts too obtain that information your of course welcome too.
The question at this juncture in time should be can the new owners pay the acquired tax debt or will they write it down or off.
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