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If the tax differential theory of dividend policy is correct, then 1. Dividend policy is irrelevant 2. Yje stock price will increase as the retained

If the tax differential theory of dividend policy is correct, then 1. Dividend policy is irrelevant 2. Yje stock price will increase as the retained earnings increase (dividend decrease) 3. The stock price will either rise or fall by a change in dividend policy. 4. The stock price will decrease as the retained earnings increase (dividends decrease). 5. Firms should follow a high payout policy.

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