please state the financial analyst’s comments on P/E ratio is correct or not and provide the reasons.

| June 14, 2016

Question
In 2009 the earning per share of SOUAET Ltd was $1.5.The company was considering a stock dividend of 10 to 10 shares.On the day of record,the market price of its shares was $30.The comments of a financial analyst are:”P/E ratio of SOUAET is 20 based on the current stock price.After the stock dividend payment,the stock price will decrease to $10 and P/E ratio will decrease to 10 as well.Thus SOUAET is more valuable for investment.please state the financial analyst’s comments on P/E ratio is correct or not and provide the reasons.

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