Save Answer Question 6 3 points Select a true statement about payout policy. Under no market frictions and no tax assumptions, stock price will increase by the dividend amount on the ex-dividend date. Firms might prefer to use repurchase over dividends when executives have stock options in hand. Firms might prefer to use dividends over repurchases to maintain flexibility in payout policy. When firm buyback its shares (repurchase), it will increase the number of shares outstanding in the market. Firm might prefer to use repurchase over dividends when the stock price is overvalued