WIN, U is P 17-16 (similar to) Question Help Assume capital markets are perfect Kay Industries currently has $100 milion invested in short form Troasury securities paying 7% and it pays out the interest payments on these securities as a dividend The boord is considering selling the Treasury securities and paying out the proceeds as a one time dividend payment Assume that investors pay a 12% tax on dividends but no capital gains taxes nor taxes on interest income, and Kay does not pay corporate taxes a. If the board went ahead with this plan, what would happen to the value of Kay stock upon the announcement of a change in policy? b. What would happen to the value of Kay stock on the ox dividend date of the one time dividend? c. Given these price reactions, will this decision benefit investors a. If the board went ahond with this plan, what would happen to the value of Kay stock upon the announcement of a change in policy? (Select the best choice below) OA. The value of Kay would fall by $100 million OB. The value of Key would remain the same OC. The value of Kay would rise by $100 million $100 million x 12% = $88 million D. The value of Kay would rise by $100 million 10/1 0/1) 6) 10/12