Cisco, a technology company plans to repatriate $67 billion in overseas cash and use a significant portion of that money to return value to shareholders through share buybacks and increased dividends.
Cisco which makes gear for computer networks said that they are planning to repatriation for the company’s third fiscal quarter while reporting to its second fiscal quarter.
New tax effect to companies
Multinational corporations had previously been reluctant to move their money into the U.S. because they have to pay heavy taxes, but the tax bill passed by Congress and signed by President Trump in December offers firms a one-off lower tax rate on funds being repatriated to the U.S.
Other companies are also having similar plans to repatriate foreign cash holdings under new tax law. Furthermore, in January APPLE announced that by paying a tax of $38 billion, they will bring back$252 billion in cash that are held abroad back to U.S.
Public who support tax changes had said that giving companies an incentive to bring the money home could hike the U.S. economy, but critics said Main Street will feel the effect of Tax changes because many companies will reward shareholders with dividends and stock buybacks.
Shares of Cisco jumped to 7% after-hours at the end of day on Wednesday.