Fpl Analysis

Staff Analysis Statement of the Problem Kate bleak, the electric utilities psychoanalyst at root Equity Securities Corporation (FESC), on the may 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 convey due to its dividend payout world extremely high (in excess of 90% in 1993) for the seismic and more competitive business environment. threesome weeks prior to this alert, Stark issued a writing on FPL stating FPL should create its dividend at $2.48 or ontogeny it slightly. Coincidently, FPLs stock ferocious 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 deposition to hold; moreover, Stark essential take the effect her testimonial will have on FPLs stock prices into condition before altering her recommendation to sell or debauch or maintaining her up-to-date hold recommendation. FPL has foursome options for its dividend policy. FPL could keep its current dividend proceeds station 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 experience in Florida and the fourth largest utility company in the unite States. FPL was formed in 1925 and grew steadily until 1970 when the increase in arouse costs and construction cost over-runs reduce its profitability. Concurrently, FPL incurred operation problems which resulted in many power outages that le d to many consumer complaints. In severali! ze to increase profitability and growth, FPLs Chairman, marshall McDonald, decided to alter the company through the acquisition of four companies: Colonial Penn manners 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 bounteous essay, order it on our website: OrderEssay.net

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