Pearl currently owns 600 shares of Ajax, Incorporated Ajax has a low payout dividend policy, and this year will pay 4 cash dividend on its shares selling currently at $40 Pearl wants a high dividend policy of 9 of the stock price What will Pearl need to do to convert this low dividend policy to a h...

Pearl currently owns 600 shares of Ajax, Incorporated. Ajax has a low-payout dividend policy, and this year

Question:

Pearl currently owns 600 shares of Ajax, Incorporated. Ajax has a low-payout policy, and this year will pay 4% cash on its shares selling currently at $40. Pearl wants a high-dividend policy of 9% of the stock price. What will Pearl need to do to convert this low- policy to a high-dividend policy for herself? Assume a world of no taxes.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...