BVX Knowledge Base
BVX Knowledge Base
M&A University

Dividend Distribution

Quick Tips:

  •             BVX distributes n% of as dividends, where n is the number entered in this cell.
  •             Typical entry is 0 (zero) because lenders generally restrict dividends.
  •             You can enter 100 if there are no dividend restrictions, or if there is no debt, or if you want to test the valuation impact of dividend restriction.


Equity holders will normally prefer to take out earnings and cash flow of the business as dividends. However, this is generally not feasible in leveraged buy-outs where lenders usually restrict dividend distribution. 

  • Enter the % of (which is the cash flow after debt service, operating needs and taxes) that will be distributed as dividends.
  • BVX does not permit dividend distribution based on earnings or generated cash flow. Dividends can be paid only if cash is available after debt service, operating needs and taxes. 
  • If BVX Cash Flow is positive BVX first distributes it as dividend based on the % entered in this cell. No dividends are distributed, even if BVX Cash Flow is positive, if 0 (zero) is entered in this cell. If cash is available after paying dividends, it is used to pre-pay borrowings (see ). 
  • If cash is still available after pre-paying borrowings, BVX automatically (default setting) distributes it as dividends. This setting can be changed in .
  • Enterprise value will be higher with 100% dividend distribution than with 0 % dividend distribution.