Ciba Gator

The Truth Behind Accenture’s High Return on Equity

Best guess is that the reduction in Paid in capital would be a good approximation for cash spent, or $943 million. 4% interest rate? That leads to $38 million in income or call it $25 million after taxes.

You already grossed up the denominator -- that was the $725 million you calculated and added back to book value. So you need to add the approx $25 million to the numerator to complete your analysis.

That boosts ROE by 1%.

You never answered the question--is your conclusion from your analysis that Accenture's ROE would be lower if they didn't buy back stock?