fect the value of the company. Finally there is a third group, which supports that an increase in dividend decreases the value of the firm.Before we decide which of the above groups we are going to support, it is essential to analyse some historical data of that company and similar ones. During the past forty-seven years FPL had a growing dividend yield. This is a sign of a healthy company and it can also be justified by the fact that the company took advantage of the high monopolistic profits. In addition, the management of the company knew that any decline of that dividend yield was expected to decrease the share price. That is based on what had happened on similar companies during the past. For example, Con ed's stock price felt from 18 dollars to 12 dollars in 1972, when the company decreased the dividend per share facing almost the same regulatory situation. It is also important to take into account how mature - efficient is the market that this Group operates. In an efficient stock market as the US one, the performance of a company is one of the major factors that influence the stock price. As a result of that market ethic, any change on dividend policy of FPL group is expected to influence the stock price in a great extent. On the other hand, the deregulation of the market is expected to decrease its market share and as a result its profits. The company is not expected to take advantage of the high monopolistic - oligopolistic profits any more. As a result, retained earnings are expected to decline, leaving no space for higher divided payments. In such a case, it may be better for the company not to increase its dividend payments, and in case the retained earning may not be needed, the company can pay even higher dividends the following years. Summarising the above, we believe that an increase in dividend payment increases the value of the company. In other words, the company should not change the policy of the past 47 years and...
