The Baldwin Locomotive Works Inc manufactures steam locomotives for No

The Baldwin Locomotive Works Inc manufactures steam locomotives for North American railways. Selected financial information for Baldwin is provided in the table below.

The CFO, Matthias Baldwin, wants to distribute $1B of cash by means of an extra dividend. What will the stock price be after the dividend?

Baldwin Locomotive Works Inc
Selected Financial Information
Stock Price $62.725
Cash $1,000M
Market Capitalization $9,408.75M
Shares Outstanding 150M
Debt $0

A) $56.06
B) $62.73
C) $68.73
D) $69.39
E) $72.26

ANSWER

A