23 Stock Dividends The market value balance sheet for KL Air is shown here. KL Air has declared a 20 per cent stock dividend. The equity goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 15,000 shares of equity outstanding. What will the ex-dividend price be?

Market Value Balance Sheet (£m)

Cash 1,290,000 Debt 1,682,500 Non-current assets 5,440,000 Equity 5,047,500 Total 6,730,000 Total 6,730,000