Question
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 compnay's
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 compnay's class A common stock has paid a dividend of $12 per share per year for the past 15 years. Management expects to continue to pay at that amount for the foreseeable future. Sally Talbot purchased 500 shares of Kelsey class A common 8 years ago at a time when the required rate of return for the stock was 11%. She wants to sell her shares today. The current required rate of return for the stock is 14%. How much total capital gain or loss will sally have on her shares?
A.) The value of stock when Sally purchased it was $? per share
B.) The value of the stock if Sally sells her shares today is $? per share
C.) The total capital gain (or loss) Sally will have on her shares is $?
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