Fpl Group

1. Why do firms pay dividend? What, in general, are the advantages and disadvantages of stipendiary bullion dividends? Because often dividends are perceived as disposable income (some stock holders look at stocks as a obtain 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 dot cash in the form of dividends. For some companies it is a mode of showing that the company is stable financially and fundament contact the commitment of salaried out a dividend. Also it is a way for companies to mitigate effect problems when they substantiate excess cash.

Advantages of remunerative cash dividends: · Way of keeping managers in check ( agency problems)- high retained earnings dont unceasingly max out shareholders nourish · Higher proportion of pension funds/ tax exempt institutions are the shareholders · Way of signaling value and stability of the business · Mean of distributing excess cash · Gives you a choice you whoremonger buy more stock or invest the cash in something else · Stock prices tend to increase when dividend increases are announced Disadvantages of paying cash dividends: · Taxed at a higher rate than dandy gains · Limits growth the company has less money to invest so if they have positive NPV projects they should invest in them · They are substantial to cut, once established cutting dividends often affects the price of the stock · Dividends have no impact on the value of a company, the stockholders can create dividends by simply selling the stock 2. What are the to the highest degree important issues confronting the FPL Group in May 1994? · The management is refer by the increasing risk facing the industry. deregulating in the utility industry ( Exhibit 1 sell wheeling) · Decline in the S&P Electric gain Index... If you want to get a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .