Assume Company X Has Been Paying Out Consistent Dividends Over

Multiple Choice

Assume Company X has been paying out consistent dividends over the past 40 years. This fiscal year, the company reports a sharp decline in the dividend it plans to pay out. The most likely reaction of the market will be:

A) Company X's stock price will decrease
B) Company X's stock price will increase initially and then decline
C) Company X's stock price will remain constant
D) None of the above