$01$:$50$:$03$

Time Remaining

Multiple Choice $13$ points

$($I ecture $12-$ Payout Policy$)$

Which of the following statements is FALSE?

Paying out excess cash through dividends or share repurchases may reduce managers' ability and temptation to waste resources.

Retaining cash can reduce the costs of raising capital and distress costs in the future, but it can also increase taxes and agency costs.

Firms with riskier earnings tend to have lower payout ratios.

Firms with higher growth needs tend to have higher payout ratios.