Sapphire Corporation, a C corporation, has two equal individual shareholders, Kelley and Alex. In the current year, Sapphire earned a net profit of $200,000 and paid a dividend of $40,000 to each shareholder. Regardless of any tax consequences resulting from their interests in Sapphire, Kelley is in the 22% marginal tax bracket (15% capital gains and qualified dividend tax rate) and Alex is in the 35% marginal tax bracket (20% capital gains and qualified dividend tax rate). With respect to the current year, which of the following statements is false?

Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.