Question
ch17 q10 please help with all 3 parts Change to high-dividend-payout policy in world of taxes. Kevin currently owns 1,100 shares of Cylon, Inc. Cylon
ch17 q10 please help with all 3 parts
Change to high-dividend-payout policy in world of
taxes. Kevin currently owns 1,100 shares of Cylon, Inc. Cylon has a low-dividend-payout policy and this year will pay a $0.24 cash dividend on its shares, which are selling currently at $23.50. Kevin wants a high-dividend-payout policy of 6% of the stock price, or $1,551.00 after tax. Assume Kevin bought the stock at $17.50 per share and his tax rates are 25% on dividends and 15% on capital gains. If Kevin changes the dividend policy from a low-dividend-payout policy to a high-dividend-payout policy, how does his wealth change?
What is Kevin's wealth in paper and cash under the current low-dividend-payout policy?
there answer is not 23.50
please help
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