Fpl Executive Summary

Executive Summary Statement of the Problem FPL Group Inc. (FPL) is the largest electric automobile utility guild in Flordia. FPL has been operating with consistent ripening since 1925, and has paid an increase dividend for the last 47 years. Recently, the utilities industry has underg genius deregulation, allowing consumer to view as their own distributor. With the later(prenominal) increased controversy, FPL is considering freezing or reducing its on-going dividend in graze to devote more profit to next growth. As a result of this uncertainty, FPLs note charge has locomote a significant 6% in one day. analyst Kate grievous of First Equity Securities had previously issued a behave testimonial based on the assumption that FPL would curb or slightly increase its dividend. Kate Stark must straight check if she should transpose her stance, and if so, if her new recommendation is to buy or sell. Discussion Kate Stark and First Equity must maintain a recom mendation to investors based without knowing for certain the gradation of action FPL bequeath take. Lets first direct at the repercussions of FPL maintaining their 47 year streak, increasing the dividend as usual. This is the most(prenominal) unlikely scenario stipulation that FPLs current payout ratio is 1.07 maculation the industry number is 0.8.

By tying up its hard currency flows in dividend payouts, FPL is shortly unprepared to face the increased competition that is sure to puzzle from industry deregulation. This would not bode considerably for early favorableness and value to investors. Recommendation Kate Stark shoul d change her previous hold recommendation to! sell. There is induce evidence that FPL may drop its dividend payout, and even if it doesnt the stock price will chill out drop in the near future. Investors who are bullish on FPLs future earnings prospects can still choose to buy impale their stock after the initial plummet that may fall out from a dividend reduction.If you want to get a full essay, order it on our website: BestEssayCheap.com

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