You are a consultant that has been hired to recommend a payout policy for UBT Corp. UBT's shareholders are almost exclusively pension funds. No shareholder of UBT owns more than 20% of all outstanding shares. You have compiled a table with the current tax rates that different types of investors might face (see below). With the information provided, how would you recommend that UBT structure its payout policy? Assume that taxes are the only market imperfection.Select the best answer.

QEUEStlon 8 5 points Save Answer You are a consultant that has been hired to recommend a payout policy for UBT Corp. UBT's shareholders are almost exclusively pension funds. No shareholder of UBT owns more than 20% of all outstanding shares. You have compiled a table with the current tax rates that different types of investors might face (see below). With the information provided, how would you recommend that UBT structure its payout policy? Assume that taxes are the only market imperfection. Select the best answerl Tax Rates for Different Investor Types Investor Type Tax Rate on Dividends Tax Rate on Capital Gains Buy and hold individual investor 20% 0% Oneyear individual investor 20% 20% Pension fund 0% 0% Corporation with less than 20% ownership 10.5% 21% O I. The rm should pay dividends and repurchase shares in equal amounts. 0 II. The rm should only repurchase shares. 0 III, How the firm structures its payout policy is irrelevant because its investors are indifferent between dividends and repurchases. 0 IV, The rm should only use dividends