The calculation
Payout = dividend ÷ AFFO. Coverage = AFFO ÷ dividend. Stressed AFFO = AFFO − |AFFO| × decline. Cushion = AFFO − dividend. Use consistent annual periods and common-share bases.
Check the arithmetic.
With AFFO of 4.00 and a dividend of 3.00, payout is 75% and coverage is 1.33×. A 15% AFFO decline reduces AFFO to 3.40 and raises payout to 88.24%. The remaining cushion is 0.40 per share.
Assumptions and limitations
AFFO has no single standardized definition. Use the issuer reconciliation and account for excluded recurring cash costs. Coverage is not a safety rating. Payout and coverage are not meaningful when AFFO is zero or negative and are shown as Not defined. Coverage is also undefined when the dividend is zero. Negative cash cushions remain visible. The downside scenario subtracts a percentage of the absolute AFFO amount: −4 at 25% becomes −5. Zero remains zero.
The output is an educational scenario. It is not a forecast, a tax determination or a personalized investment recommendation.