(a) Suppose stock prices do not reflect the private information owned by the financial market regulator. But stock prices fully reflect all publicly available information. According to the Efficient Market Hypothesis (EMH), explain whether the market efficiency is weak-form efficiency, semi-strong-form efficiency, or strong-form efficiency. (3 marks)

(b) Briefly explain the over-investment problem from the perspective of the agency costs between debtholders and equity holders. (3 marks)

(c) Explain the benefit of paying the dividend, from the perspective of agency costs between management and shareholders. (2 marks)