QUESTION 3 (25 MARKS) (a) How is it possible that dividends are so important, but at the same time, dividend policy is irrelevant? (5 marks) (b) What is the impact of a stock repurchase on a company's debt ratio? Does this suggest another use for excess cash? (4 marks) (c) Rock & Roll Corporation (RRC) currently has 400,000 shares of stock outstanding that sell for $90 per share. Assuming no market imperfections or tax effects exist, what will the share price be after: i) RRC has a five-for-three stock split? (2 marks) ii) RRC has a 15% stock dividend? (2 marks) ii) RRC has a 42.5% stock dividend? (2 marks) iv) RRC has a four-for-seven reverse stock split? (2 marks) v) Determine the new number of shares outstanding in part (i) through (iv) (8 marks)