Which one of these statements is true?

Multiple Choice

• Acquisitions are generally believed to be an excellent alternative to dividends.
• Current tax law favors dividends over repurchases from the stockholders' point of view.
• The IRS code discourages the accumulation of surplus cash thereby encouraging dividends.
• Managers tend to benefit more from decreasing a firm's size rather than increasing its size.
• Dividend payout policies are always set according to the best interest of the shareholders.