Question: High Tech Corp. cut its research and development budget in 2 0 1 0 by $ 4 , 0 0 0 , 0 0 0
High Tech Corp. cut its research and development budget in by $ in order to improve its cash flow for the year. Which of the following statements is MOST correct?
A The stock price will increase only if reported profits in are higher than profits reported in
B The stock price may decrease because investors may predict that future cash flows will decrease due to the lack of innovation and new products.
C The stock price will likely increase because the value of stock is based on reported cash flow.
D The change will have no impact on stock price because the company's profits will not change in
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