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The board of directors of McKay Company has approved a 20% stock dividend. The firm currently has net income of $900,000. There are 300,000 common

The board of directors of McKay Company has approved a 20% stock dividend. The firm currently has net income of $900,000. There are 300,000 common shares outstanding and the stock has a P/E ratio of8. What will be the firm's common stock price after the stock dividend?

$24

$37.50

$3

$20

$2.50

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