6. Dividends and share price [LO 17.1] Last month, Central Power Company, which had been having trouble with cost overruns on a nuclear power plant that it had been building, announced that it was

‘temporarily suspending payments due to the cash flow crunch associated with its investment program’. The company’s share price dropped from $28.50 to $25 when this announcement was made. How would you interpret this change in the share price (that is, what would you say caused it)?