The impact of an announcement of a dividend suspension on stock prices varies depending on investor expectations and the market's reaction.
We believe that stock prices rise due to expectations of reinvestment and financial soundness. Specifically, this is the case when a company suspends dividends, which encourages it to reinvest profits and is expected to lead to future growth and improved profitability, or when a dividend suspension contributes to financial soundness and debt repayment.
On the other hand, we believe that stock prices fall due to investor disappointment and a decline in trust. Specifically, this is the case when investors who were expecting dividends become disappointed and sell their shares, or when the market judges that a dividend suspension indicates a deterioration in the company's financial situation.
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