Answer:
$20
Explanation:
Current Stock Price:
= (Net income ÷ common shares outstanding) × P/E ratio
= (900,000 ÷ 300,000) × 8
= $24
No of Stock Dividend issued:
= common shares outstanding × Percent of stock dividend approved
= 300,000 × 20%
= 60,000
No of Outstanding Sharing share after stock dividend:
= common shares outstanding + No. of Stock Dividend issued
= 300,000 + 60,000
= 360,000
Common stock price after the stock dividend:
= = (Net income ÷ common shares outstanding after stock dividend) × P/E ratio
= (900,000 ÷ 360,000) × 8
= $20
