board is deciding whether it should pay a liquidating dividend of $ 50 per share or an equivalent extraordinary annual dividend. The finance department got the following relevant information for making the decision:

a. 85% of the shareholders are between 30 and 50 years old. The remaining 15% is more than 70 years old.

b. The average tax bracket of Payolas shareholders is 25% higher than the average of the investors in public companies in the country.

c. The government is planning to reduce the tax rate on capital gains from 25% to 20%. The current tax rate applicable to ordinary dividends is 22%.

Required: What should Payola Board do? Give specific recommendations, back them up with numbers in a, b, c above