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    Value of stock after dividend: Example Problem

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    2 Million shares of common stock outstanding, net income 55,000 and P/E ratio for the stock is 10. Management is planning a 20% dividend.

    What will the price of stock be after dividend? If investor owns 100 shares before dividend does the total value of his share change? Explain.

    What formula can I use in Excel to solve this?

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    Solution Summary

    Solution provides steps necessary to calculate the value of the stock after dividend.