💡 “If the company has so much cash, shouldn’t it just pay 100% dividend every year?”

Our customer asked us one day.

And it’s a good question — because if you’re the new investor, wouldn’t you prefer to get all the cash back every year?

Here’s the thing 👉 In a DCF valuation, whether the company pays 30% or 100% dividend, the value doesn’t change much. Why?

Because in valuation theory, shareholders already “own” that cash flow — it doesn’t matter whether it sits inside the company or gets paid out.

What really matters is:

• Can the company keep generating free cash flow?
• Does it have good opportunities to reinvest?
• Or is it better off paying more dividend since cash is just piling up?

So yes, a 100% dividend might feel great, but when it comes to valuation, it’s not the magic button. The real driver of value is the company’s ability to generate sustainable free cash flow.

🔎 Contact ORNA for more information.