Which of the following helps explain the conclusion by Miller and Modigliani (1961) that dividends are irrelevant in a world of perfect capital markets with no taxes?

a. Because investors must pay taxes on the dividends they receive, they are indifferent to receiving dividends

b. Because investors can buy or sell shares of a firms stock to essentially create or undo that firms dividend payout, they are not willing to pay a premium for any firms shares based on that firms dividend policy.

c. Issuance costs incurred when issuing shares of common stock cause investors to be indifferent to dividends.