The Whirlpool Corporation, a US company, has a history of paying high dividends compared to its competitors.

(a) In the US, capital gains tend to be taxed at a lower rate compared to dividends.List and explain two reasonswhy Whirlpool's investors may support the company's decision to continue to pay high dividends instead of reinvesting its earnings to generate higher capital gains.(6 points)

(b) Suppose Whirlpool purchases a physical asset for $500,000, such as a building or factory equipment. Under straight-line depreciation, Whirlpool would be able to depreciate the asset over 10 years. Alternatively, under a special form of accelerated depreciation allowed by the government, Whirlpool would be allowed to depreciate the asset over 5 years. Which method of depreciation would Whirlpool prefer? Straight-line or accelerated? Explain. (6 points)

(c) Which of the two methods of depreciation described in part (b) would lead to more capital investment by Whirlpool? Explain. (4 points)

(d) Suppose the federal corporate income tax in the US was raised from the current rate of 21% to a higher rate of 40%. Would this policy change lead to MORE or LESS investment spending by Whirlpool? Explain your reasoning. (4 points)