Good question and my response is only a guess- that there is no dividend reduction. The stock decline is caused by the pressure on bonds (lowering NAV) and the selling pressure that has caused the widening discount.
If rates continue to move up, we may get a div increase albeit on a smaller NAV.
You might want to get up to speed on the situation. All fixed income funds are getting pounded for a number of reasons. Those funds that are heavily muni weighted even more so. This has nothing to do with a dividend cut though ACG is famous for doing just that every couple of years.
This fund could easily drop another $1/share by the end of the year.
The target duration of QE2 is 5.5 yrs and the average duration of ACG holdings is 6.1 yrs. As such ACG should not be getting hit quite so hard. ACG is not overweight in long term debt. More likely it's the herd mentality of asset valuation that phage mentions, where you buy the SPY because it appears cheap relative to BND, etc. There's no viable price discovery in such a method, but it has its followers nonetheless. ACG, despite the drop is still within its longer term trading range, (ex GFC).