Florida Light & Power Dividpend Policy

Executive Summary FPL come with Inc. Problem The problem that the FPL meeting Inc. is face currently is how to change their dividend policy to make the ships partnership financially successful and financially attractive to investors. Background The FPL Groups major subsidiary is Florida Power & group A; Light Company (FP& amp;L). The familiarity was formed in 1925 done the consolidation of many electric and gas companies. The companionship enjoyed unshakable growth until the mid-seventies when rising gas prices and rising whirl apostrophizes stagnated growth. The company decided to diversify into other industries and create a timbre control program inspired by the Japanese. This was temporarily successful, save when the subsidiaries started losing money and with demand for energy rising at one time again, the company decided to focus on FP&L. The company did this by hiring James Broadhead in 1989 to take over as CEO. Broadhead brought the co mpanys focus back to the utility fabrication by selling off the other subsidiaries, expanding utility capacity, and alter the cost provision. Broadheads efforts lowered operating and maintenance be from 1.82 cents per kilowatt-hour in 1990 to 1.61 cents per kilowatt hour in 1993. Broadhead sum upd the client stand to 3.

4 million accounts making FP&L the largest utility in Florida and the fourth largest in the United States. As capital expenditures decrease, FP&L profits will increase even more than and FP&Ls gross sales growth is communicate to be 2.7% which .9% higher than the national avera ge. psychoanalysis FP&L had a divid! end payout ratio of 91% on all dividends in 1993 jibe to exhibit 7. The total dividend payout ratio in 1993 was 117.48% according to the add up in the financial projections in Exhibit 6. This is completely unsustainable and untold higher than the attention average of 75.17% in 1993. FP&L could cut their dividend payout ratio. If the company cuts the dividend payout ratio, the stock price will fall. We...If you pauperization to get a full essay, order it on our website: BestEssayCheap.com

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