16-7 Stock dividend Example -cont- After the stock dividend what is the new price per share and what is the new value of the firm? Answer O The value of the firm was 2 mil x $15 per share,or S30 mil. After the dividend the value will remain the same O Price per share=$30 mil /3 mil sh=$10 per sh Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 16- 7 Irwin/McGraw-Hill Stock Dividend Example - cont - After the stock dividend what is the new price per share and what is the new value of the firm? Answer The value of the firm was 2 mil x $15 per share, or $30 mil. After the dividend the value will remain the same. Price per share = $30 mil / 3 mil sh = $10 per sh