Dividend Policy at FPL Group FPL Group Overview: The FPL Group was Florida’s largest electric utility group and the fourth largest in America. The FPL Group had annual revenues of exceeding $5 billion. Florida Power & Light Company‚ the main subsidiary of the FPL Group had 3.9 million customer accounts and covered a service area that included six of America’s ten fastest growing metropolitan areas. a. Summarize the key elements of FPL’s financial policy and compare it with other relevant
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It seemed that the board of directors at MCI was divided between two possible solutions. Should the company finance the repurchase by increasing MCI’s debt financing by at least doubling the current debt-equity ration that stood at 36% at that time (MCI)? Conversely‚ would a more conservative approach of using an open-market purchase program‚ announcing its intentions to repurchase its stock from "time to time" but only as corporate funds become available‚ be more appropriate (MCI)? The answer to this
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commitment compared with share buyback‚ because‚ according to Lintner managers prefer to increase dividend rather than decreasing them. On the other hand‚ share buyback does not commit the company to future pay-out. In other words‚ repurchasing reserves financial flexibility relative to dividend. In fact‚ the study of …‚ company with higher operating cashflow are likely to increase dividend‚ while company with higher non operating cash flow are more likely to increase repurchase. In our case‚ the G corporation
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Group-based case report Torstar Corporation BUSN81 Theory of Corporate Finance 2011 Autumn 1. Introduction The case of Torstar Corporation suggests the plan and result of repurchasing its Class B shares in December of 1997. Besides this‚ the situation of its business structure‚ capital structure and expenditures‚ future plan are also described in the case. Therefore‚ the purpose of our case study is to state‚ analyze and drew to some important conclusions about Torstar Corporation
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focusing on a share repurchase financed by cash and new debt issuance. After the analysis of a simple proposal‚ it is obvious that the financial ratios and cost of capital are strengthened after the bond issuing and share buyback. We then evaluate the amount of debt issuing that is most favorable to the company by analyzing the trade-off involve and under the consideration of the information asymmetry and agency cost. Also‚ a special dividend plan is introduced and compared with the repurchase. Detailed
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Equity appears two places within the financial statements: 1.) Shareholder’s Equity section of the balance sheet Example 1: Abbreviated Balance Sheet – The Gap‚ Inc. THE GAP‚ INC. CONSOLIDATED BALANCE SHEETS ($ and shares in millions except par value) February 2‚ 2013 January 28‚ 2012 ASSETS Current assets: Total current assets 4‚132 4‚309 Property and equipment‚ net 2‚619 2‚523 Other long-term assets
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financial measures into account when performing corporate bond rating service. Debt is raised to repurchase shares rather than the normal case of capturing expansion opportunities to strengthen cash flow. This is not going to be regarded favorable to debt holders since the debt coverage ability in terms of cash or collateral is not strengthened. UST is characterized positively by commanding market share position in the moist smokeless tobacco market‚ strong brand name recognition‚ premium product offering
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the Market Share Repurchases Are at Fastest Clip Since Financial Crisis By DAN STRUMPF Sept. 15‚ 2014 7:24 p.m. ET Companies are buying their own shares at the briskest clip since the financial crisis‚ helping fuel a stock rally amid a broad trading slowdown. Corporations bought back $338.3 billion of stock in the first half of the year‚ the most for any six-month period since 2007‚ according to research firm Birinyi Associates. Through August‚ 740 firms have authorized repurchase programs‚ the
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rigorous share repurchase policy by buying back 19% of its shares in 2001. However to sustain its profitability position within the industry for the next 5 years‚ DC now requires a new round of debt financing. Problem Statement The problem statement is as follows: “What is the appropriate level of debt that can be raised by DC in order • to provide financial flexibility to the company • to ensure value creation for the shareholders in terms of dividend payout and share repurchases • to lower
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it always did‚ but on the other side‚ company itself can get too self confident and fail to see the newcomers and other threats. UST has ignored newcomers‚ and now they all have a growing market shares‚ while only UST Inc. total share‚ consequently‚ decreases. Smaller players are expanding their market share primarily by cutting prices‚ something that UST ignored. UST Inc. decided to fight competition not by decreasing prices‚ but with overstretching it product lines. However‚ this might not be the
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