why is Stalla saying that the payment of stock dividends does not involve a cash outflow?
For example, in the Stalla book page 14-8, it says “payment of stock dividends or even stock splits, however, is seldom restricted [in debt covenants] because they do not involve any cash outflow.
then, the CFAI text states goes to talk about that “limitations on dividend payments and stock repurchases may be included in indentures”. page 178 of book 5 (last paragraph).
last time i checked dividends are paid with cash, cash that can no longer be used to service debt.作者: prav_Cfa7 时间: 2013-4-12 22:33
they can be paid in stock/preferred shares..no direct CF outflow作者: chunty 时间: 2013-4-12 22:33
well maybe there should be a distinction between a cash dividend and a stock dividend…i’ll write stalla it tripped me up.作者: Zesty 时间: 2013-4-12 22:33
read again…
it says “stock dividend” clearly doesn’t it… or did you make that up?作者: towardsutopia21 时间: 2013-4-12 22:34
