Common stock value: Zero growth Kelsey Drums Inc. is a well-established supplier of fine percussion instruments to orchestras all over the United States. The companys class A common stock has paid a dividend of $2.80 per share per year for the last 12 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 200 shares of Kelsey class A common stock 10 years ago at a time when the required return for the stock was 7.6%. She wants to sell her shares today. The current required rate of return for the stock is 9.25%. How much capital gain or loss will Kim have on her shares?
Solution
	Value of stock 10 years ago				Current value of stock
	Dividend				Dividend
	Dividend growth rate				Dividend growth rate
	Required return				Required return
	Stock value				Stock value
	Number of shares				Number of shares
	Total value				Total value
	Amount Kim paid for stock 10 years ago
	Amount stock can be sold for today
	Per share capital gain/loss
	Total capital gain/loss