How can corporate management defend itself against a hostile takeover attempt?

Answer 1

There are three strategies management can use to defend itself against a hostile takeover attempt. First, it
can use the corporation's profits to buy its own stock, rather than to pay dividends to stockholders, until the
corporation virtually owns itself. This makes it impossible to take over. Second, it can make itself less
attractive by borrowing heavily and paying a one-time cash dividend to its own stockholders. Third, it can
encourage a friendly corporation to attempt a takeover, under which the threatened management may be
able to survive.