Yifan Wu Class Session: MWF 1:50-2:45 PM Case 1: Dividend Policy at FPL Group Inc. Because of FPL’s reluctance to increase its dividends and increased competition in the electric utility industry, Merrill Lynch’s utility analyst downgraded FPL Group Inc. Kate Stark, utility analyst at First Securities Corporation, wondered whether she should issue an updated report about stocks of FPL. We investigated the potential risks faced by FPL and its payout policies, and according to the results, we recommend
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Dividend Policy at FPL Group, Inc. FPL Group, Inc., the Florida's largest electric utility company, after 47 years of uninterrupted increase in dividends, was considering cut dividends in 1994. How would this unusual move affect FPL and the investors? Meanwhile, what would Kate Stark, the analyst at the Equity Securities Corporation, recommend regarding investment in FPL's stock - buy, sell, or hold? 1. Current Dividend Policy at FPL • FPL’s current payout ratio = Dividend per Share/Earning
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Dividend Policy at FPL Group, Inc. Executive Summary Florida Power & Light Company was formed in 1925 through the consolidation of numerous electric and gas companies. After enjoying steady growth until the 1970s, FPL began experiencing operating problems and reduced profitability due to factors like rising fuel costs and construction over-runs. To address these problems, Chairman Marshall McDonald decided to diversify into higher growth businesses and guided FPL to make four major acquisitions-
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Dividend Policy at FPL Group, Inc Case Q1) Why do firms pay dividends? What, in general, are the advantages and disadvantages of paying cash dividends? Ans: The purpose of dividend payouts is to return wealth back to the company shareholders instead of using it for operations. Dividends provide investors with regular income from their investments and act as an incentive to continue or start investing in the company. The company’s share price will drop in relation to the dividend payout
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Group Assignment 4 Dividend Policy at FPL Group, Inc. 1. Why do firms pay dividend? What, in general, are the advantages and disadvantages of paying cash dividends? The sole purpose of dividends per se is to return wealth back to the shareholders of a company. Shareholders take risk and invest in company and the dividends are rewards for commitment, trust and risk-taking. Dividends transfer economic value from the company to the shareholders instead of the company using the money for operations
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FPL – An OverviewFPL Group, Inc. is Florida’s largest electric utility company. In 1925, through the consolidation of numerous electric and gas companies, they formed Florida Power & Light Company (FP&L). FP&L grew steadily over the next 50 years until rising fuel costs, operating issues, and construction costs began to decrease profitability. In the mid-1980s, FPL diversified with four major acquisitions - Colonial Penn Life Insurance Company, Telesat Cablevision, Inc., CBR Information Group
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Case Analysis - FPL Energy FPL Energy is one of the nation’s leading independent generators of electricity. Dedicated to generating clean energy, 80 % of its capacity is fueled by clean and renewable resources. The United States is the nation with the largest generator of wind energy, and it operates the two largest solar fields in the world. FPL Group, with annual revenues of more than $8 billion, is one of the nation's largest providers of electricity-related services. Its principal subsidiary
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Why do firms pay dividends? What is general, are the advantages and disadvantages of paying cash dividends? Firms pay dividends based on their finance and investing strategies and decisions. If a firm is looking to finance a project through borrowing the company may want to give cash dividends to its shareholders to reduce the amount of their cash balances on hand. Also dividends are a way to give back to their investors and shareholders. By them receiving the cash dividends they are gaining immediate
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Advanced Corporate Finance – SMM471 2013–2014, Coursework Questions and Instructions Coursework will consist of group work leading to (a) an active discussion and (b) a written report on one of the case studies. At the beginning of term, student groups will be randomly assigned to one of the following two cases: “Valuation of AirThread Connections” or “Dividend Policy at FPL Group, Inc.” Please find out which case you have been allocated to and the week in which that case is discussed. In the following
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course are available for download for a fee. Group Papers/Presentations: Each student will be put into a group, and each group will submit a paper and present a particular case. The paper should include the answers to the questions regarding the case assigned prior to the presentation day. Presenting a case involves summarizing the case, answering the questions, and leading a class discussion for the case based on the questions. Please do not change groups during the semester. Peer Evaluations:
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