Which of the following statements about dividend policy is true? Select all that apply.

1)Dividends make it easier for managers to waste money.

2)Companies can choose to repurchase equity instead of paying dividends by shifting their dividend policies. If dividends are taxed more heavily than capital gains, taxpaying investors should welcome such a move and value the firm more favorably.

3)Firms have short-term target dividend payout ratios

4)None of the other statements is/are true

5)Managers are eager to make dividend changes that might have to be reversed

6)Dividend changes follow shifts in short-term earnings

7)Managers make sure that dividends exhibit similar volatility as corporate earnings.