Cooper Industries

FINANCE-II
CASE DIVIDEND POLICY AT FPL (A)
FINANCE-II
ASSIGNMENT

PGP 2009 - 2011

Submitted by:
Angad Kikla

Submitted as kick downstairs fulfilment of course implyment of FIN-II to
Prof. Hariprasad

Submitted on 4th jar against 2010

Contents
Executive Summary3
Concepts4
Why do firms pay dividend?4
Arguments against dividends4
Arguments for dividends4
close4
Dividend Theories4
Signalling Hypothesis4
Clientele Effect4
Dividend paying Methods4
Residual4
stableness4
Hybrid4
Conclusion4
Problem Statement4
Issues con campaigning FPL4
Potential increase competition4
Dividend Policy4
Interest Expenses4
Subsidiaries4
Supply4
Alternatives4
Criteria for Evaluation4
afoot(predicate) Payout Ratio FPL perspective4
Current Payout Ratio Investor Perspective4
Recommended root4

Executive Summary
FPL is currently grappling with a number of issues uplifted Interest Rates, Competition, Supply issues etc. Keeping these various factors in mind, it has to come up with a dividend payout that satisfies both the shareholders as comfortably as long term prospects.
The problem in front of Kate Stark is what would the management decide on the dividend payout and will it make a motion the investment rating of FPL stocks.




The alternatives for Kate are
Hold Recommendation
Buy Recommendation
shit Recommendation
The evaluation of these alternatives will be based on how the investors would react to the dividend payout decided by FPLs management wedded the environmental constraints they are working under.
Deregulation in the sedulousness due to Retail wheeling would increase the competition among different companies. This would have an adverse impact on the earnings of FPL. FPL would require reserves in order to deal with this increased competition.
The caller-out has maintained a continuous streak of increased dividends for the previous(prenominal) 47 consecutive years. Any cuts in dividends would send a negative signal to the market.
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