5. Which of the following statements is false regarding the corporate payout policy?
(A)Because long-term investors can defer the capital gains tax until they sell, there is a tax advantagefor share repurchases over dividends.
(B) Managers are much Iess committed to dividend payments than to share repurchases.
(C) The dividend-capture theory states that in absence of transaction costs, investors can trade sharesat the time of the dividend so that non-taxed investors receive the dividend.
(D)Differences in tax preferences create clientele effects, in which the dividend policy of a firm isoptimized for the tax preference of its investor clientelc.
(E)While many investors have a tax preference for share repurchases rather than dividends, thestrength of that preference depends on the difference between the dividend tax rate and the capitalgain tax rate that they face.