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Part $1$

Assume capital markets are perfect. Kay Industries currently has $ $150$ million invested in$$ short$-$term treasury bills paying $7\%$ comma and it pays out the interest payments on these securities as a dividend. The board is considering selling the treasury bills and paying out the proceeds as a$$ one$-$time dividend payment. Assume that investors pay a $20\%$ tax on dividends but no capital gains taxes nor taxes on interest$$ income, and Kay does not pay corporate taxes.