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ValueLine Fundamentals Flashcards Preview

T.B.'s deck > ValueLine Fundamentals > Flashcards

Flashcards in ValueLine Fundamentals Deck (1)
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1

How to measure if a company can afford to keep paying its present dividend?

Cash flow per share MINUS dividends declared per share MINUS capital spending per share = free cash flow.

- Now compare this free cash flow number to dividend declared per share.

- if free cash flow is higher then they can afford to pay the dividend.

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