You are a consultant that has been hired to recommend a payout policy for UBT Corp. You have compiled a table with the current tax rates that different types of investors in the stock market face (see table below). Assume that all of UBT's shareholders are investors of Type 1 and Type 2. Given this information, how should UBT structure its payout policy? Select the best one.

I.	The company should only pay dividends, because Type 2 investors will prefer dividends and Type 1 investors will also pefer dividends
II.	The company should only pay dividends, because Type 1 investors will prefer dividends and Type 2 investors will be indifferent between dividends and repurchases.
III.	The company should only repurchase shares, because Type 2 investors will prefer repurchases and Type 1 investors will be indifferent between dividends and repurchases.
IV.	Both investor groups will be indifferent between the company paying dividends or repurchasing shares.
V.	The company should only repurchase shares, because Type 1 investors will prefer repurchases and Type 2 investors will be indifferent between dividends and repurchases.

\begin{tabular}{|lrr|} \hline Investor Type & Tax Rate on Dividends & Tax Rate on Capital Gains \\ \hline Type 1 & 30% & 10% \\ Type 2 & 20% & 20% \\ Type 3 & 10% & 20% \\ Type 4 & 0% & 0% \\ \hline \end{tabular}