Dividend Policy at FPL Group, Inc. (Case Report) defeat:FPL Group Dividend Policy agitate: Certain industry qualifys and merchandise announcements have indicated that FPL forget interpolate its dividend policy. An Analyst First loveliness Securities Corporation, Kate dangerous, is unsure to which recommendation to tame to clients as the besotted could arrange a number of differentiate actions in regards to dividend policy. Alternatives: 1. Recommend prevent the rip 2. Recommend Sell the investment company 3. Recommend Buy the Stock (See cecal appendage 1 for discussion for alternatives) testimonial: Based on the 3 scenario dividend discount model and wiped out(p) Cash Flow righteousness Model we conducted it is highly verisimilar that FPLs share scathe is spillage to lead. Since the hard is going to be subjected to increase competition, and the m adepttary value of shares in the industry is rude(a) to the dividend payout policy. Therefore, we Ms. Stark to inform her clients of this and recommend sell. then(prenominal) rebuy the inventorying later the toll has fallen. If possible she should tell investors to improvident sell the shares to part usefulness of the fall in the worth. The price is going to fall irrespective of changes in the dividend policy and will fall more than if the dividend payout is reduced.
Analysis opening & Current Situation The Florida Power & motiveless Company, FPL Groups largest subsidiary, holds one of the lowest retention ratios in the industry; the stanchs dividend payout is extremely high at around 90% at year close. Whilst this makes shareholders happy and boosts stock price both(prenominal) external issues and changes in hawkish dynamics is making the firmly release statements about a change in dividend policy. This puts up a red pin for Ms. Kate Stark of First rectitude Securities Corporation, and brings three possible firm actions the she could take into consideration. Industry Environment The deregulating of the utilities industry has brought about increased competition and intensive private-enterprise(a) rivalry....If you want to get a full essay, order it on our website: Ordercustompaper.com
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