3. Institutional Background. True or false? If false, correct the statement. (LOI)

a. A corporation cannot pay a dividend if its legal capital is impaired or if it is insolvent.

b. There is no important difference between a regular and a special dividend.

c. The effective tax rate on capital gains can be less than the stated rate.

d. Corporations settle on a target payout ratio and in every year pay out that fraction of the year's earnings.

e. Managers and investors are more concerned with dividend changes than dividend levels.

f. Stock price will be higher when a corporation distributes cash by repurchases rather than cash dividends.