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To: PAL who wrote (102619)	2/18/1999 12:38:00 PM
From: T L Comiskey	Read Replies (1) \| Respond to of 176387

Paul.... <Dell does not pay dividend since MCD believes>...speaking of believing..I BELIEVE his middle initial is S as in Scott...Yes..?....Tim

To: PAL who wrote (102619)	2/18/1999 1:23:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

PAL, in fact share buybacks are dividends. Some time ago Geoff Nunn and I had extensive correspondence on this issue. The upshot is that share buybacks work just like dividends but they have the added advantage of being taxed at the capital gains rate. From a practical point of view, this means that if the cash spent to repurchase stock were instead used to pay a cash dividend it would be subject to ordinary income taxes in the year received. But since the repurchase of stock increase the value of the remaining shares outstanding it is taxed as capital gains, which means that not only is it taxed at a lower rate, but the tax is deferred until the sale of the security. This issue is discussed in most elementary finance textbooks. See for example, Higgins Financial Management: Theory and Applications. TTFN, CTC

To: PAL who wrote (102619)	2/18/1999 2:27:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 176387

PAL, Ah, no wonder con men make so much money. Share buybacks are not a scam, especially if done at major bottoms. If done honestly, they are even o.k. at tops, though they are lousy investments of shareholder capital. However, when cos buy back shares and then turn around and issue most of them to a handful of insiders, it is a legal act. It is legal because the sheep vote for it. If the sheep didn't vote for it, it would be called embezzlement. But the baa baa crew doesn't even know what is happening to their cash. MB