Dividend recap

the company borrows in order to pay a dividend to its shareholder

In more detail

The trick where the company that was bought takes out a new loan and pays it to its owner as a dividend. The owner gets back what they invested without selling the business itself.

It was invented by funds for the speed of returning money to their investors while the company itself has not yet been sold.

Covered in the primer of chapter 6.

Where it appears in the course

In the academy “Dividend recap” is not a definition but an operation: you post it yourself and watch what it does to the balance sheet.

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