Use the following 3 statements to answer this specific question

- dividends are the legal obligation to the firm

- a firms residual earnings technically belong to the preferred shareholders

- the market prices of preferred shares increase when market rate decline and vice versa.

Option a) only 3 is correct

Option b) only 2 is correct

Option 2) only 1 is correct

Option d) 1 and 3 are correct

Option e) 2 and 3 are correct