3. (a) You are an institutional investor and have the collected the following information on five firms in order to assess their dividend policies: In millions of dollars (figures in parentheses are negative). Company Equity Beta A&B CDF L&M P&Q X&Y Free Cash Flow to Equity $ 55 $ 60 ($ 15) $ 20 ($ 5) Dividends Return on Paid $ 35 8% $ 12 14.5% $ 5 4.0% $ 12 1.5 % $8 0.80 1.30 1.25 0.90 1.05 14% The average risk-free rate during the period was 7% and the average return on the market was 12%. (i) Which of these firms you would pressure to pay more in dividends and why? (5 marks) (ii) Which of the firms would you encourage to pay less in dividends and why