Which One of These Is a Con of Paying Dividends

Multiple Choice

Which one of these is a con of paying dividends?

A) Paying dividends reduces agency costs when excess cash is available to a firm.
B) Dividends can be used to signal a firm's optimistic outlook.
C) Dividends are frequently taxed as ordinary income.
D) Dividends appeal to income-seeking investors.
E) Managers can pay dividends to keep cash from bondholders.