Fpl and American Home Products

In: Business and Management

Submitted By john89
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Questions for the HBS case on “American Home Products (AHP) Corporation”

1. How much business risk does AHP face? How much financial risk would AHP face at each of the proposed levels of debt shown in case Exhibit 3? How much potential value if any can AHP create for its shareholders at each of the proposed levels of debt?

2. What capital structure would you recommend as appropriate for AHP? What are the advantages of leveraging this company? the disadvantages? How would leveraging up affect the company's taxes? How would the capital markets react to a decision by the company to increase the use of debt in its capital structure?

3. How might AHP implement a more aggressive capital structure policy? What are the alternative methods for leveraging up?

4. In view of AHP's unique corporate culture, what arguments would you advance to persuade Mr. Laporte or his successor to adopt your recommendation?

Due date for Dividend Policy at FPL Case: 07/22/2013

Questions for the case “Dividend Policy at FPL Group, Inc.”

1. Why do firms pay dividend? What, in general, are the advantages and disadvantages of paying cash dividends?

2. What are the most important issues confronting the FPL Group in May 1994?

3. From FPL’s perspective, is the current pay out ratio appropriate? Would a higher pay out ratio be more appropriate? A lower pay out ratio?

4. From an investor perspective, is FPL’s pay out ratio appropriate?

5. As Kate Stark, what would you recommend regarding investment in FPL’s stock----buy, sell, or hold?…...

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