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Attempts to measure a corporation's worldwide effective tax rate may have had unexpected consequences for the tax function, which now bring into question the CTO's reporting structure. The financial markets recognize that the savings generated by a lower effective tax rate generally translate into larger cash resources, lower-cost financing of operations and increased dividends. The detriment of a high effective tax rate is the company is paying a high rate of tax on their book income, which reduces earnings per share. |
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