Question
Kelsey Drums, Inc., is a well established supplier of fine percussion instruments to orchestras all over the US. The company's class A stock has paid
Kelsey Drums, Inc., is a well established supplier of fine percussion instruments to orchestras all over the US. The company's class A stock has paid a dividend of $8 per share per year for the last 18 years. Management expects to continue to pay at that amount for the foreseeable future. Sally Talbot purchased 300 shares of Kelsey Class A common 6 years ago at a time when the required rate of return for the stock was 12%. She wants to sell her shares today. The current required rate of return for the stock is 15 %. How much total capital gain or loss will Sally have on her shares. What is the value of the stock when Sally purchased it? (per share)
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