Question: Dubai Metro s stock price was at 100 per share when
Dubai Metro’s stock price was at $100 per share when it announced that it will cut its dividends for next year from $10 per share to $6 per share, with additional funds used for expansion. Prior to the dividend cut, Dubai Metro expected its dividends to grow at a 4 percent rate, but with the expansion, dividends are now expected to grow at 7 percent. How do you think the announcement will affect Dubai Metro’s stock price?
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