fpl case question

fpl case question - not make sense What does financial...

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Dividend Policy at FPL Group, Inc. (A) (9-295-059) 1. Make a timeline of events. 2. Briefly discuss the history of public utilities including why they were given monopolies and why their prices were regulated by the government. 3. Who makes the dividend policy decision? 4. Explain the difference between declaration date, ex-dividend date, record date and payment date. 5. Define dividend payout ratio. 6. See Exhibit 6. Assuming FPL keeps the amount of dividend payments the same, calculate the projected payout ratio for each year from 1994E – 1998E. 7. See Exhibit 4b. Calculate the Dividend Payout Ratio using “Dividends per Share and Earnings Per Share before Extraordinary Items.” 8. See Exhibit 4b. Calculate the average annual growth rate in dividends from 1984 to 1993. 9. Define dividend yield. 10. Discuss FPL’s diversification strategy in the 1980s. Why did the management do it? What did they buy? Why did it make sense or
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Unformatted text preview: not make sense? What does financial theory tell us about corporate diversification? 11. Contrast Broadhead’s vision with McDonald’s vision. 12. How did S&P change their guidelines in October 1993. 13. What is FPL’s record of dividend increases? Why is this important or not important? 14. Why do stock prices typically decline following the announcement of a cut in dividends? 15. What is the competitive landscape for FPL? 16. Analyze FPL’s projected capital expenditures relative to historical dividend payments. 17. See Exhibit 8. How are utility stock prices affected by interest rates and why? 18. See Exhibit 10. What is the composition of FPL’s stock ownership, i.e., how much is held by individual investors, institutional investors and managers? How might this affect the dividend decision?...
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fpl case question - not make sense What does financial...

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