Firms use defensive tactics to fight off undesired mergers. These tactics include

	a) repurchasing their own stock.
	b) getting white knights to bid for the firm.

	c) getting a white squire to purchase stock in the firm.
	d) all of the above

e) none of the above

Which of the following statements is most CORRECT?
	a) Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition.

	b) Managers often are fired in takeovers, but never in mergers.
	c) If a company that produces military equipment merges with a company that manages a chain of motels, this is an example of a horizontal merger.

		d) All of the above
	e) none of the above

A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary , so the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $3,000,000. If the parent's marginal tax rate is 35% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and what is the amount of net dividends received?