Florida Power & Light Company, major subsidiary of FPL Group ("FPL") Dividend Policy Analysis

What drives regulars to pay dividends? Advantages and disadvantages. Dividends be set by the firms board of directors and mouth window come in the form of gold or profligate dividends. Instead of retaining earnings for expansion or enthronement in growth opportunities, the profits of the firm are reborn into dividends for the shareholders. This meat that high pay egress ratios are oftentimes paid by progress companies with limited opportunities for more growth, while zero to low payout ratios are paid by junior firms that are expanding and investing. This ratio peck be found by dividing the number of dividends by the realise income. Dividends pot in addition be classified as mine run (paid on a regular basis), or extraordinary (paid out as a one(a) time occurrence without commitment). While these dividends idler come in cash form, they sewer also be offered as threadbare dividends. This type of dividend, however, can lead to dilution of legality and a dro p-off of value per share. A channel dividend is enter as a transaction from retained earnings to virtue capital. Repurchase of stock is yet an other form: the firm repurchases its own stock, which, inappropriate dividends, is only taxed on the capital gains of the shareholders. This one time compositors case also allows the company to put cash back in the hands of investors without making a large term commitment.

Dividends also help to provide confidence in the company´s financial well being. The dividend policy can provide investors with a signal regarding the firm: if dividends are increased, for example, it can be seen as a sig nal that management is confident in early ! cash flows and believes the increased dividend can be sustained. On the other hand, if dividends are cut, it can be seen as a drop in the firms quality and lead to a decline in share... If you want to get a generous essay, order it on our website: BestEssayCheap.com

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