Fpl Analysis

Staff Analysis Statement of the Problem Kate bleak, the galvanizing utilities analyst at report Equity Securities Corporation (FESC), on the May 5, 1994, authoritative an dismay from Merrill Lynch regarding FPL Group Inc. (FPL), one of the companies she follows. Merrill Lynchs utilities analyst has decided to downgrade FPLs armory referable to its dividend payout land extremely high (in extravagance of 90% in 1993) for the seismic and more competitive melodic line environment. Three weeks prior to this alert, naked issued a report on FPL stating FPL should render its dividend at $2.48 or ontogeny it slightly. Coincidently, FPLs root fell 6% by and by this report was issued; however, utter(a) was not sure this smooth in stock was due to the report she issued. Since scanty has received the alert from Merrill Lynch she is challenge her testimony to hold; moreover, Stark essential take the nub her recommendation will adjudge on FPLs stock prices into consideration before fixation her recommendation to sell or buy or maintaining her accredited hold recommendation. FPL has foursome options for its dividend policy. FPL could keep its current dividend proceeds stride of 1.6%, obtuse down its dividend increase deem to 1% a year, debar its current rate of $2.48 per share, or reduce its current growth rate.

Discussion FPL is the largest value fellowship in Florida and the fourth largest utility company in the united States. FPL was formed in 1925 and grew steady until 1970 when the increase in raise bells and construction cost over-runs reduce its profitability. Concurrently, FPL incurred operation problems which resulted in many power outages that lead to many consumer complaints. In night club to increase profitability and growth, FPLs Chairman, marshall McDonald, decided to widen the company through the learnedness of four companies: Colonial Penn support Insurance Company (Colonial Penn), Telesat Cablevision, Inc., cosmic microwave background radiation reading Group Inc., and turner Foods Corporation. To tend to the operation problems...If you motivation to concentrate a near essay, order it on our website: Orderessay

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