Page 3 of 9 Question 4 1. Explain the residual theory on dividend policy. [3 Marks) il. Discuss how taxation affects the dividend policy of a firm. [3 Marks) Explain the Modigliani and Miller (1961) theorem on dividend irrelevance. iii. [4 Marks] [Total 10 Marks] [Word Limit - 300 Words] Question 5 i. Discuss the main criteria used in the selection of investment projects. [6 Marks) Explain how investments decisions are made using the Net Present Value and the Internal Rate of Return. il. [4 Marks) [Total 10 Marks] Word Limit - 300 Words] [TOTAL FOR SECTION A: 50 MARKS]