B&O Railroad Inc. transports industrial products and supplies throughout the North Eastern United States. Selected financial information for B&O is provided in the table below. B&O is considering a stock dividend of 7.5%. What will the stock price be after the dividend (Assuming no other changes)? B&O Railroad Inc.
Selected Financial Information
$$\begin{array} { | l | c | }
\hline \text { Stock Price } & \$ 68 \
\hline \text { EPS } & \$ 6.00 \
\hline \text { Dividends per share } & \$ 1.24 \
\hline \text { Payout Ratio } & 20.66 \% \
\hline \text { Shares Outstanding } & 150 \mathrm { M }\
\hline
\end{array}$$

Question

B&O Railroad Inc. transports industrial products and supplies throughout the North Eastern United States. Selected financial information for B&O is provided in the table below. B&O is considering a stock dividend of 7.5%. What will the stock price be after the dividend (Assuming no other changes)? B&O Railroad Inc.
Selected Financial Information
$$\begin{array} { | l | c | } 
\hline \text { Stock Price } & \$ 68 \
\hline \text { EPS } & \$ 6.00 \
\hline \text { Dividends per share } & \$ 1.24 \
\hline \text { Payout Ratio } & 20.66 \% \
\hline \text { Shares Outstanding } & 150 \mathrm { M }\
\hline
\end{array}$$

Quizplus · Accepted Answer

After a 7.5% stock dividend, the stock price is adjusted by dividing the original price by 1.075. So, $68 / 1.075 = $63.26.

B&O Railroad Inc A)$6280 B)$63

B&O Railroad Inc A)$6280
B)$63