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c17 q9 please help with parts 1-3 Change to low-dividend-payout policy in world of taxes. Scott currently owns 800 shares of Twelve Colonies, Inc. Twelve
c17 q9 please help with parts 1-3
Change to low-dividend-payout policy in world of taxes. Scott currently owns 800 shares of Twelve Colonies, Inc. Twelve Colonies has a high-dividend-payout policy, and this year will pay a $3.00 cash dividend on its shares, which are selling currently at $24.50. Assume Scott pays 25% tax on dividend distribution and 25% on capital gains. Also assume Scott originally paid $24.50 for these shares. If Scott wants to receive only $150 after tax, is his wealth affected by changing this dividend policy from a high-dividend-payout policy to a low-dividend-payout policy? What is Scott's wealth in paper and cash under the high-dividend-payout policy? $ (Round to the nearest dollar.)
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