Posted: March 23rd, 2017
supplier of fine percussion instruments to orchestras all over the United States.
The company’s class A common stock has paid a dividend of $5.00 per share per
year for the last 15 years. Management expects to continue to pay at that amount
for the foreseeable future. Sally Talbot purchased 100 shares of Kelsey class A
common 10 years ago at a time when the required rate of return for the stock was
16%. She wants to sell her shares today. The current required rate of return for the
stock is 12%. How much capital gain or loss will Sally have on her shares?
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