Which one of the following would tend to favor a low$-$dividend payout?

Elimination of the tax deferral on capital gains

Higher tax rates on capital gains than on dividend income

Endowment fund investors who cannot spend principal

High flotation cost for equity issues

Investors' desire for a high$-$dividend yield

Assume that satisfied clienteles exist. Given this assumption, which one of these statements is

correct?

All firms will adopt a high$-$dividend$-$payout policy.

All firms should adopt a low$-$dividend$-$payout policy.

All dividends become irrelevant.

Dividend policy is irrelevant as long as each clientele group remains satisfied.

A firm can increase its share price by increasing its dividend payout.