Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 211.05

-0.7%

Dec 1 3:59 PM EST

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To: pass pass who wrote (26784)	12/7/1997 5:31:00 PM
From: Chuzzlewit	Read Replies (1) of 61433

Pass Pass, stock buy backs have a number of interesting implications. First, it is a way to convert dividends to capital gains because stock buy backs result in increased price per share. At the very least, this defers taxes on the "dividend" since only a sale of the stock triggers a taxable event. And at the time of the sale, given a sufficient holding period and assuming a profit (quite a stretch with ASND of late), the dividend is converted into a long-term capital gain which is taxed at a lower rate than ordinary income. The second point is that stock buybacks need to be measured against what the company perceives to be its best investment opportunities. Regards, Paul

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