1710Change tohigh-dividend-payout policy in world of taxes.

Kevin currently owns800shares ofCylon, Inc. Cylon has alow-dividend-payout policy and this year will pay a $0.29cash dividend on itsshares, which are selling currently at$25.00.Kevin wants ahigh-dividend-payout policy of7.5% of the stockprice, or $1,500.00after tax. Assume Kevin bought the stock at$21.00per share and his tax rates are30% on dividends and20% on capital gains. If Kevin changes the dividend policy from alow-dividend-payout policy to ahigh-dividend-payout policy, how does his wealthchange?

(3 part question)