i) Which of the following is most correct about the role of taxes in deciding the dividend payout ratio: Select one: a. If an institution is exempt from taxes, it would be prudent for such investors to invest in low dividend firms b. If personal taxes is less than corporate taxes, a high payout may be preferred c. If corporate taxes is less than personal taxes a high payout ratio may be preferred d. If an investor is exempt from taxes, the differential tax treatment between dividends and capital gains does matter and would prefer a low payout

ii) Under proposition II, the _________________ remains the same even if the firms debt/equity ratio increases. Select one: a. Cost of equity of the firm b. Capital structure of the firm c. Weighted Average cost of debt d. Required rate of return