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

Question

Quizplus · Accepted Answer

S = 11ea7fdb_fc56_bef1_a768_bdb587c20e8d_TB2902_11 The split ratio, denoted S, for a 7.5% stock dividend is: S = 11ea7fdb_fc56_bef2_a768_75911545d2d3_TB2902_11 = 1.075 The stock price after the stock dividend is: P_A = 11ea7fdb_fc56_bef3_a768_01b866912331_TB2902_11 P_A = 11ea7fdb_fc56_bef4_a768_6f7f2a2ff877_TB2902_11 = $63.26