STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE:RE:RE:RE:RE:Dennis on BNN

[ffhwatcher3]

They have loan covenents on their existing debt that (probably) won't let them do that.  They do have a large capacity to borrow but that is to buy existing businesses or buses.  Again the terms of the loans dictate what they can do with the proceeds. 
The math you are suggesting makes sense but it should be pointed out that in times of distress and negative cash flow, dividends can be cut or stopped.  Interest payments can not.
When you take the dividend into account, which is approx. 6% of Revenue, it is a high volume, low margin business.  They spend the entire 94% that is leftover to run the existing business.  To grow the business, they must borrow and then eventually do a share issuance to repay the long term debt, if all goes well.