a. "In a world of perfet market where no personal/corporate taxes, agency costs or infomation asymetries, a lower dividend payout will reduce a firm's cost of capital". b."Unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost." c. If a firm repurchases stock insted of paying a dividend, the no. of shares fallas and EPS rise. So, stock repurchase must always be preferred to paying dividends