$38.$ Roxana has a participating whole life insurance policy with a cash value of $$12,000$ and an adjusted cost base of $$2,500.$ This year, Roxana received a $$3,500$ dividend cheque from the insurance company.

What are the consequences of Roxana's dividend

a$)$ The dividend will be grossed$-$up but is eligible for the dividend tax credit.

b$)$ The ACB of Roxana's policy will be reduced to $$0.$

c$)$ There will be no income tax implications for Roxana until she disposes of th policy.

d$)$ Roxana will have to report taxable income of $$3,500.$