As of December 31, 2005, Two Otherwise Identical Companies in the Same

Multiple Choice

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 forward one year, which outcomes are least likely?
I. East Co. requires debt financing.
II. West Co. increases its dividend payout.
III. West Co.'s share price is twice that of East Co.
IV. East Co. repurchases outstanding shares.

A) I and II
B) II and IV
C) I, II and III
D) II, III and IV