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P4 Common stock value: Zero growth Kelsey Drums Inc. is a well-established supplier of fine...

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Finance

P4 Common stock value: Zero growth 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 $2.80 per share per year for the last 12 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 200 shares of Kelsey class A common stock 10 years ago at a time when the required return for the stock was 7.6%. She wants to sell her shares today. The current required rate of return for the stock is 9.25%. How much capital gain or loss will Kim have on her shares?

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