Fpl Executive Summary

Executive Summary Statement of the Problem FPL Group Inc. (FPL) is the largest galvanizing utility guild in Flordia. FPL has been operating with consistent result since 1925, and has paid an increase dividend for the last 47 years. Recently, the utilities industry has underg mavin deregulation, allowing consumer to fetch their own distributor. With the later(prenominal) increased opposition, FPL is considering freezing or reducing its water function dividend in entrap to devote more profit to early growth. As a result of this uncertainty, FPLs communication channel expense 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 prevent or slightly increase its dividend. Kate Stark must directly check if she should turn her stance, and if so, if her new recommendation is to buy or sell. Discussion Kate Stark and First Equity must watch a recommendation to investors based without knowing for certain the course of action FPL bequeath take. Lets first brass at the repercussions of FPL maintaining their 47 year streak, increasing the dividend as usual. This is the approximately unlikely scenario stipulation that FPLs current payout ratio is 1.07 charm the industry number is 0.8.

By tying up its interchange 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 well(p) for early favorableness and value to investors. Recommendation Kate Stark should change her previous hold recommendation to sell. There is o blige evidence that FPL may drop its dividen! d 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 ass their stock after the initial plummet that may do from a dividend reduction.If you want to get a full essay, order it on our website: OrderEssay.net

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