In a Period of Rising Prices a Company Pays Dividends

In a period of rising prices a company pays dividends equal to its net income for the year. Which statement about this company is true?

A) The company is paying out an amount exactly equal to the company's net income. Therefore, the capital available to the company is exactly equal to the amount of capital available at the beginning of the year.
B) The company is paying out some capital in excess of the return stockholders received through the creation of net income.
C) The company is paying dividends that are less than its net income and is increasing the capital available for the company's use.
D) Without knowing the amount of inflation relative to the company's marginal interest rate on any additional debt which it may incur, it cannot be determined whether the