Kevin currently owns

800

shares of Cylon, Inc. Cylon has a low-dividend-payout policy and this year will pay a

$0.23

cash dividend on its shares, which are selling currently at

$24.00.

Kevin wants a high-dividend-payout policy of

5%

of the stock price, or

$960.00

after tax. Assume Kevin bought the stock at

$19.00

per share and his tax rates are

30%

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?