Why would someone expect that dividends might be cut? First of all, dividends have been DECLARED for the rest of the year. Second, should a restatement occur, net taxable income and NAV will INCREASE. Third, PSEC has .18 per share of previous undistributed earnings that they would use to insure that the dividends are maintained through the end of the year.
However, lets assume for argument sake that dividends are reduced next year to $1.20 (.10 per month) which is certainly sustainable at current earnings of $1.24 which does not include an increase in earnings if a restatement occurs. At the current price, the yield would be over 12.2%. A reasonable argument could be made, IMO, that the pps would increase.
The big question is, what will happen to their leverage ration if a restatement happens, not if dividends will be maintained.
My understanding--Management today indicated that leverage ratio would not change
if Holding Companies (not the underlying companies held by the holding companies)
were consolidated--The SEC seems OK with that---
I agree with your premise that if for any reason (even strategically deliberate) by management to
reduce the dividend to say, $.09167 monthly ($1.10 annual) this would have a salutary effect
on the stock with the stock potentially moving back to $11,00. The "savings" from the
reduction of the dividend could be used to jump start the aggressive stock buyback program
which would also result in even more cash available as of course the dividends would
no longer be paid out on the reduced shares.
If this were to happen, over the next year, an investor buying the stock in here, would
realize a combined return (appreciation + dividend of over 20%!