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Last month, TMB Power Company, which had been having trouble with cost overruns on a nuclear power plant that it had been building, announced that
Last month, TMB 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 of dividends to the shareholder due to the cash flow crunch associated with its investment program. The companys stock price dropped from $28.50 to $25.00 when this announcement was made. How would you interpret this change in the stock price? Does MM proposition hold in these circumstances?
kindly answer the bold part of the question also.
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