Directors Usually Declare Dividends Less Than the Legal Maximum and Thereby

Directors usually declare dividends less than the legal maximum and thereby allow retained earnings to increase as a matter of corporate financial policy. Which of the following is not a valid reason for this practice?

A) Available cash did not increase by as much as the amount of earnings, so paying the maximum legally permitted dividends would require raising more cash.
B) Restricting dividends in prosperous years may permit continued level or steadily growing dividend payments in poor years.
C) The firm may need funds for expansion of working capital or for plant and equipment.
D) The firm can distribute the funds to shareholders with lower tax burdens for them by using the cash to repurchase shares.
E) The firm can distribute steadily growing dividend payments to shareholders thereby increasing the market value of the firm's common stock and increasing the earnings multiple that investors apply.