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UU Corporation has paid a cash dividend of $1.00 per share for each of the last 5 years. However, they just announced that the dividend
UU Corporation has paid a cash dividend of $1.00 per share for each of the last 5 years. However, they just announced that the dividend will be reduced to 50 cents per share for each of the next 5 years. Without any additional information, in terms of signaling, what do you expect the stock price to do immediately after the announcement of the dividend reduction?
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The stock price will likely increase
The stock price will likely decrease
The stock price will likely not change
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