Kelsey Drums, Inc , is a well established supplier of fine percussion instruments to orchestras all over the United States The companys 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...

500 016 4167 Value of stock when p ...

Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United

Question:

Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company’s class A has paid a 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?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...