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Score: 0 of 1 pt 15 of 26 (15 complete HW Score: 42.31%, 11 of 26 pts P 17-15 (similar to) Question Help Assume that the only capital market imperfection is taxes Kay Industries currently has 5150 million invested in shorter Treasury securities paying 8%, and it pays out the interest payments on these securities as a dividend The board is considering seling the Treasury securities and paying out the proceeds as a one-time dividend payment. Assume that Kay must pay a corporate tax rate of 22% investors pay notes, and there is no taxable gain from the sale of the securities a. If the board went ahead with this plan, what would happen to the value of Kay stock upon the wouncement of a change in policy? b. What would happen to the value of Kay stock on the ex dividend date of the one time dividend? c. Given these price reactions will this decision benefit investors a. If the board went head with this plan, what would happen to the value of Kay stock upon the nouncement of a change in policy? (Select the best choice below) O A The value of Kay would se by $150 million x 22% $33 million OB. The value of Kay would l by 5150 million OC. The value of Kay would remain the same OD. The value of Kay would rise by $150 million Score: 0 of 1 pt 16 of 26 (15 complete HW Score: 42.31%, 11 of 26 pts P 17-16 (similar to) Question Help Assume capital markets are perfect Kay Industries currently has $200 milion invested in short term Treasury Securities paying 6.5%, and it pays out the interest payments on these secunties as a divided. The board is considering selling the Treasury secure and paying out the proceeds as a one-time dividend payment. Assume that wivestors pay a 15% ton dividends but no capitalistes normes on interest income, and Kay does not pay corporate aces If the board went whead with this plan, what would happen to the value of Kay stock upon the arouncement of a change in policy? . What would happen to the value of Kay stock on the se dividend date of the one time dividend? c. Given these price reactions, wil this decision berinvestors? all the board werd head with this pler, we would happen to the www Kay stock upon the wouncement of a change in (Select the best choice tow) OA The value of Kay would fall by $200 milion OB. The value of Kay would rise by $200 milion-$200 million x 15% 5170 milion OC. The value of Kay would rise by $200 million OD. The value of Kay would remain the same Score: 0 of 1 pt 15 of 26 (15 complete HW Score: 42.31%, 11 of 26 pts P 17-15 (similar to) Question Help Assume that the only capital market imperfection is taxes Kay Industries currently has 5150 million invested in shorter Treasury securities paying 8%, and it pays out the interest payments on these securities as a dividend The board is considering seling the Treasury securities and paying out the proceeds as a one-time dividend payment. Assume that Kay must pay a corporate tax rate of 22% investors pay notes, and there is no taxable gain from the sale of the securities a. If the board went ahead with this plan, what would happen to the value of Kay stock upon the wouncement of a change in policy? b. What would happen to the value of Kay stock on the ex dividend date of the one time dividend? c. Given these price reactions will this decision benefit investors a. If the board went head with this plan, what would happen to the value of Kay stock upon the nouncement of a change in policy? (Select the best choice below) O A The value of Kay would se by $150 million x 22% $33 million OB. The value of Kay would l by 5150 million OC. The value of Kay would remain the same OD. The value of Kay would rise by $150 million Score: 0 of 1 pt 16 of 26 (15 complete HW Score: 42.31%, 11 of 26 pts P 17-16 (similar to) Question Help Assume capital markets are perfect Kay Industries currently has $200 milion invested in short term Treasury Securities paying 6.5%, and it pays out the interest payments on these secunties as a divided. The board is considering selling the Treasury secure and paying out the proceeds as a one-time dividend payment. Assume that wivestors pay a 15% ton dividends but no capitalistes normes on interest income, and Kay does not pay corporate aces If the board went whead with this plan, what would happen to the value of Kay stock upon the arouncement of a change in policy? . What would happen to the value of Kay stock on the se dividend date of the one time dividend? c. Given these price reactions, wil this decision berinvestors? all the board werd head with this pler, we would happen to the www Kay stock upon the wouncement of a change in (Select the best choice tow) OA The value of Kay would fall by $200 milion OB. The value of Kay would rise by $200 milion-$200 million x 15% 5170 milion OC. The value of Kay would rise by $200 million OD. The value of Kay would remain the same