Which of the following statements is FALSE? While many investors have a tax preference for share repurchases rather than dividends, the strength of that preference depends on the difference between the dividend tax rate and the capital gains tax rate that they face. In perfect capital markets, buying and selling financial securities is a zero-NPV transaction, so it should not affect firm value. The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy. If there is a reasonable likelihood that future earnings will be insufficient to fund future positive-NPV investment opportunities, a firm may start accumulating cash to make up the difference. In perfect capital markets, an open market share repurchase has no effect on the stock price, and the stock price is the same as the ex-dividend price if a dividend were paid instead