Astout, a pharmaceutical company, stock currently sells for $75 per share. Two months ago the firm announced a cash dividend of $7.5 next year, and the dividend is expected to grow at 4%. Astout required return was 14% but due to COVID-19 outbreak and higher risk exposure the firm required return is expected to increase to 18%. Based on this information, and assuming everything else is constant, do you expect the stock price to?

Select one:

a. Decrease

b. Increase

c. Remain unchanged

d. Not enough information