How would a $1M leveraged dividend issued this year affect the three statements, if amortized for next 5 years, straight line? Would there be amortization expense of $200K for the first year? Thanks.
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You only amortize the transaction cost.
$1M cash into the Company via debt $1M cash out of the Company via dividend Amortize the transaction cost
Cash would remain unchanged, debt would go up by $1M and Retained Earnings would go down by $1MM on the balance sheet.
No change on the Income Statement.
$1M inflow and $1M outflow from Financing activities on the Statement of Cash flows.
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