Which one of these statements is true?

Multiple Choice

Managers tend to benefit more from decreasing a firms size rather than increasing its size.

Current tax law favors dividends over repurchases from the stockholders point of view.

Acquisitions are generally believed to be an excellent alternative to dividends.

Dividend payout policies are always set according to the best interest of the shareholders.

The IRS code discourages the accumulation of surplus cash thereby encouraging dividends.