Here are several facts about typical corporate dividend policies. Which are true and which false?Explain.

1. (a) Companies decide each years dividend by looking at their capital expenditure requi- rements and then distributing whatever cash is left over.

2. (b) Managers and investors seem more concerned with dividend changes than with divi- dend levels.

3. (c) Managers often increase dividends temporarily when earnings are unexpectedly high for a year or two.

4. (d) Companies undertaking substantial share repurchases usually finance them with an offsetting reduction in cash dividends.