Final answer:
Behavioral finance argues for increased stock repurchases. Dividends are not tax disadvantaged.
Step-by-step explanation:
A. behavioral finance argues for increased stock repurchases.
This statement is true. Behavioral finance is a field of study that combines psychological theories with finance to explain how and why individuals make investment decisions. One of the main arguments in behavioral finance is that investors are often irrational and influenced by emotions, leading to mispriced stocks. Stock repurchases can help increase the value of the remaining shares by reducing the number of outstanding shares.
B. dividends are tax disadvantaged.
This statement is false. Dividends are a form of payment that some companies make to their shareholders out of their profits. While dividends are subject to taxes, they are often taxed at lower rates than other forms of income, such as wages or interest income.