Calculate bank gogo earnings per share

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Reference no: EM133122008

PT Bank GoGo Tbk. has 50 million shares of stocks outstanding. In fiscal year 2020, Bank Gogo's after-tax profits reached IDR15 billion and the firm's stock is trading at a priceearnings multiple of 40, with a stock price of IDR12,000 per share. During 2020, Bank Gogo management issues a 25% stock dividend since the pandemic crisis and bleak sales have significantly affected Bank Gogo's earnings performance. 

Instruction: 

a. Calculate Bank Gogo's earnings per share before and after the stock dividend. 

b. Suppose an investor owns 50 board lots of Bank Gogo before the stock dividend. Use the price earnings multiple to estimate the value of the investor's holdings both before and after the dividend. 

c. Comment on the results of the stock dividend for current shareholders.

Reference no: EM133122008

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