Modeling Dividends with Respects to Cash Sweeps in Credit Model
I've been tasked with reconfiguring a credit model, orginally had a 100% cash sweep going straight to debt repayment, now an equity portion is being introduced with a dividend. My question is how to factor this dividend payment into the model? I need to know how much distribution the company can payout while also paying down the debt. Would a set mandatory amortization for the debt, then a dividend payment, then an excess CF sweep be the correct way? Thanks.
Yeah that sounds about right mandatory debt repayments-> dividends -> cash sweep. Though I guess the $ of dividend you will need to confirm with associate/VP by looking at payout ratio, etc or if company mentioned anything about dividends
Thanks for the help, appreciate it.
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