free cash flow v/s dept12 Sep 2018 23:37
So often we hear the polarized opinion of whether the very high divi is paid from debt, or free cash flow. I am very positive about the future vod sp, but I am worried about this black or white view.. Surely if vods dept is more than the free cash flow, then vod is in dept. If I have £ 1,000,000 in the bank (free cash flow) but have depts of £2,000,000, I am in dept. So when someone says the divi is paid from dept, why disagree? Perhaps it is good to pay the divi from dept, (gearing) . Don't just disagree for the sake of it, you just feed there negative opinion. Vod could pay off some of its dept instead of paying a divi, but it chooses not to , which may be a very good business decision, but this means it is effectively paying the divi from dept.