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You Are Reviewing the Annual Report for Mega City Electronics

question 13

Essay

You are reviewing the annual report for Mega City Electronics. You noticed that Mega City cut its dividend last year and the stock price when up.
Required: Explain how a dividend cut could lead to an increased stock price.


Definitions:

Mortgage

A type of loan typically used to purchase real estate, where the property itself serves as collateral for the loan.

Monthly Payment

A fixed amount of money paid at regular intervals, typically monthly, for a loan or mortgage.

Trust Fund

A legal entity that holds and manages assets on behalf of another person or group, often used for estate planning or to distribute assets according to the trust creator's wishes.

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment’s cost.

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