Question $1(0\mathrm{.}5$ points$)$

As of December $31,2005,$ two otherwise identical companies in the same industry. East Co$.$ and West Co$.,$ have dividend payouts of $20\%$ and $40\%,$ respectively. Looking foreard one year, which outcomes are least likely?

East Co$.$ requires debt financing.

iI$.$ West Co$.$ increases its dividend payout.

III. West Co's share price is twice that of Cast Co$.$

IV$.$ East Co$.$ repurchases outstanding shares.

II$,$ III and IV

H$1$ and $"$II

II and IV

I and II