AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
Tax-paying corporations might be able to boost after-tax net income by investing some of their long-term core cash in municipal securities, which are exempt from state, local and federal taxes. Companies in the top 34% tax bracket should be able to increase after-tax income without unduly increasing their credit or market risk.
Along with higher after-tax yields, tax-exempts have "reasonable liquidity" and manageable credit risk, says Kenneth Neal, assistant treasurer at Lowe's Companies Inc., Wilkesboro, NC. It reported 1994 sales of $5 billion.
Lowe's, which operates 330 home centers in 21 states, has $30 million to $40 million of its cash reserves invested in a tax-advantaged investment account. "In a rising-rate environment, the 35-40 day issues have performed pretty well," Mr. Neal adds. "You get …