Question: Zucchini Electronics has increased its annual dividend by 2 . 2 percent per year for each of the past 2 8 years. Recently, the company
Zucchini Electronics has increased its annual dividend by percent per year for each of the past years. Recently, the company has been experiencing very low levels of growth, so market experts and investors anticipated that the firm would announce that it expects dividends to decrease by percent per year forever. This morning, Zucchini Electronics announced that it expects dividends to decrease by percent per year forever, which would be a larger decrease than any annual dividend decrease in the company's history. The amount of the expected dividend decrease was not known before the announcement, so the announcement can be considered the release of new information. Which of the following assertions best describes what most likely happened with Zucchini Electronics stock immediately after the announcement? No other news was released except the expected dividend decrease and the stock's risk is expected to remain unchanged. Markets are semistrong form efficient.
The actual return was less than the expected return
The actual return was greater than the expected return
The actual return was equal to the expected return
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