Scott currently owns 500 shares of Twelve Colonies, Incorporated. Twelve Colonies has a high-payout dividend policy, and

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Scott currently owns 500 shares of Twelve Colonies, Incorporated. Twelve Colonies has a high-payout dividend policy, and this year will pay $2.00 cash dividend on its shares selling currently at $18.00. Scott wants a low dividend policy of 2% of the stock price. What will Scott need to do to convert this high-dividend policy to a low-dividend policy for himself? 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...
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