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Corp. has been paying $2 per share in dividends each quarter since 2010. Due to covid-19, the cash flows of the company decreased significantly and
Corp. has been paying $2 per share in dividends each quarter since 2010. Due to covid-19, the cash flows of the company decreased significantly and the companys board of directors decided that they cannot pay $2 per share dividends going forward. As a result, they reduced the quarterly dividend payments to $1 per share and announced that they will continue paying $1 each quarter going forward. What will happen to the price of the companys stock as a result of this decision if the annual discount rate is 16%?
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