Damodaran Breaks Down The Benefits Of MLPs

After the market’s big reaction to the news that Kinder Morgan Inc (NYSE:KMI) would consolidate the master limited partnerships (MLPs) that it spun off years ago, you could be forgiven for wondering why so many people were excited to see Kinder Morgan give up tax benefits. “If the only difference between pass-through entities and taxable entities were on taxes, the assessment that mattered for value would be whether you paid more or less in taxes with one form over the other,” explains NYU Stern School of Business professor Aswath Damodaran. “However, the laws that created the pass-through entities also created restrictions…