Which of the following is most likely to have a negative impact on stock price?
A) Omitting a stock repurchase offer
B) Failure to increase the dividend at the same rate as previous years
C) Cutting the dividend per share in dollar terms
D) Reducing the dividend payout ratio

Question

Quizplus · Accepted Answer

Cutting the dividend per share in dollar terms is likely to disappoint investors who may have expected a certain level of income from their investment in the company. This could lead to a sell-off of the stock and a decline in its price. Omitting a stock repurchase offer or reducing the dividend payout ratio may not necessarily have an immediate negative impact on the stock price. Failure to increase the dividend at the same rate as previous years may be disappointing, but not as much as cutting the dividend per share in dollar terms.

Which of the Following Is Most Likely to Have a Negative