Fpl Analysis

Staff Analysis Statement of the Problem Kate bleak, the electric utilities analyst at root Equity Securities Corporation (FESC), on the whitethorn 5, 1994, received an dismaying from Merrill lynch regarding FPL Group Inc. (FPL), one of the companies she follows. Merrill Lynchs utilities analyst has decided to downgrade FPLs demarcation due to its dividend payout world extremely high (in excess of 90% in 1993) for the seismic and more competitive business environment. tierce weeks prior to this alert, Stark issued a distinguish on FPL stating FPL should kip down its dividend at $2.48 or ontogeny it slightly. Coincidently, FPLs stock heavy-handed 6% by and by this report was issued; however, Stark was not sure this fall in stock was due to the report she issued. Since Stark has received the alert from Merrill Lynch she is questioning her good word to hold; moreover, Stark essential take the effect her good word will have on FPLs stock prices into experimental con dition before altering her recommendation to sell or get or maintaining her received hold recommendation. FPL has foursome options for its dividend policy. FPL could keep its current dividend proceeds measure of 1.6%, obtuse down its dividend growth rate to 1% a year, debar its current rate of $2.48 per share, or reduce its current growth rate. Discussion FPL is the largest utility friendly relationship in Florida and the fourth largest utility company in the coupled States. FPL was formed in 1925 and grew steadily until 1970 when the increase in enkindle costs and construction cost over-runs reduce its profitability. Concurrently, FPL incurred operation problems which resulted in many power outages that led to many consumer complaints. In dedicate to increase profitability and growth, FPLs Chairman, marshall McDonald, decided to shine the company through the acquisition of four companies: Colonial Penn spirit Insurance Company (Colonial Penn), Telesat Cablevision, Inc., CBR reading Group Inc., and turner ! Foods Corporation. To tend to the operation problems...If you want to concentrate a amply essay, order it on our website: OrderEssay.net

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