value comes from their current operations and assets. Because Georgia Atlantic is a low growth company they should in fact pay out dividend as is the case for low growth firms. But this is not the case for Georgia Atlantic. Question 2 It might be Best for Georgia Atlantic to have an announced dividend policy because the biggest advantage of having an announced dividend policy is that this will reduce the investors (stockholders) uncertainty, and reductions in uncertainty are associated with lower capitalization
1. Why do firms pay dividend? What, in general, are the advantages and disadvantages of paying cash dividends? Because often dividends are perceived as spendable income (some stock holders look at stocks as a source of income as it is easier to get a dividend instead of selling the stocks). Sometimes investment opportunities are low, they reach the limit of their marketplace, so companies decides to distribute cash in the form of dividends. For some companies it is a way of showing that
team have a well-presented PowerPoint presentation about their analysis of dividend policy at FPL group Inc. They have demonstrated the process of how they come up with these results briefly. They have also examined the company’s history, financial figures and some related industry information, and gave reasonable recommendations. The report team expected that the company would most likely to hold their currently dividend policy and suggested their clients to sell the company shares in short term.
recommendation regarding FPL. The HOLD recommendation seems to be the most appropriate. Our judgement assumes a dividend cut from FPL. However, this dividend cut would be a precise strategic choice rather than one dictated by financing difficulties. Specifically, the dividend cut will raise future growth, with little effect on the stock price. By cutting dividends, FPL can react better to future threats. After an initial panic selling triggered by the news shock (FPL never cut its dividend in the past 47
management must decide on the form of the dividend distribution, generally as cash dividends or via a share buyback. Various factors may be taken into consideration: where shareholders must pay tax on dividends, firms may elect to retain earnings or to perform a stock buyback, in both cases increasing the value of shares outstanding. Alternatively, some companies will pay "dividends" from stock rather than in cash. The purpose of an optimal dividend policy should be to maximize shareholders’ wealth
Report on Dividend policy Case analysis on Bank EXECUTIVE SUMMARY A dividend is a usually distributed in cash form to stock holders of a corporation approved by the board of director. It may also include stock dividend or other forms of payment. A stock dividend represents a distribution of additional shares to common stockholders. Dividends are only cash payments regularly made by corporations to their stockholders. The dividend policy such as the payment of dividend affects the market
Dividend Policy at FPL Group FPL Group Overview: The FPL Group was Florida’s largest electric utility group and the fourth largest in America. The FPL Group had annual revenues of exceeding $5 billion. Florida Power & Light Company, the main subsidiary of the FPL Group had 3.9 million customer accounts and covered a service area that included six of America’s ten fastest growing metropolitan areas. a. Summarize the key elements of FPL’s financial policy and compare it with other relevant
Subject: Dividend Policy at FPL Group, Inc. Problem: Should FPL cut dividend? And should Stark revise her investment recommendation? Options: 1) Keep dividend per share growth at 1.65% 2) Dividend per share grows at 1% 3) Keep dividend per share constant at $2.46 4) Cut dividend by 30% and repurchase 10 million shares each year after the cut Recommendations: We recommend FPL to cut dividend by 30% in order to free up more cash to facilitate its growth and fight the upcoming competitions
DIVIDEND POLICY AT FPL GROUP INC Q.1 DIVIDEND POLICY AT FPL GROUP, INC In 1994 FPL Group, the parent company of Florida Power and Light Company, announced a reduction in its quarterly dividend from $.62 ($2.48 annual) a share to $.42. This was the first-ever dividend cut for a healthy utility, so the company did its best to explain to investors why it had taken such an unusual step. Table 1. ----------------------------------------------------------------------------------------- Year
comes from their current operations and assets. Because Georgia Atlantic is a low growth company they should in fact pay out dividend as is the case for low growth firms. But this is not the case for Georgia Atlantic. Question 2 It might be Best for Georgia Atlantic to have an announced dividend policy because the biggest advantage of having an announced dividend policy is that this will reduce the investors (stockholders) uncertainty, and reductions in uncertainty are associated with lower capitalization