If investors are expecting a dividend cut, then the announcement of the decreased dividend payment will:

The options available are:

a. cause the stock price to decline by more than the dividend amount

b. not affect the stock price as long as the announcement was in line with expectations

c. cause the stock price to increase if the cut was greater than anticipated

d. the signal that the next dividend will be cut even further

b. not affect the stock price as long as the announcement was in line with expectations

Explanation:

Given that the announcement will be made in line with the expectation of the investors, then the announcement of the decreased dividend payment will have no effect on the stock price. Thus, it will neither cause the price of the stock to decline not to rise since the investors are already aware of the market situation and there is no reason to make panic sales or enthusiastic buys.

Hence, the correct answer is option B.

answer; closing the loop;