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Dividends and stock price

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Dividends and Stock Price

Last month, Central Virginia 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 dividend payments due to the cash flow crunch associated with its investment program." The company's stock price dropped from $28.50 to $25 when this announcement was made. How would you interpret this change in the stock price (i.e., what would you say caused it)?

Reference no: EM133061539

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