Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Chapter 29, Problem 17P
Summary Introduction

To discuss: The benefits and costs for prohibiting insider trading.

Introduction:

When a person trades on a public company’s securities or stock through access to non-public facts about the company, it is termed as insider trading.  Few examples of insider trading are as follows:

  • Information regarding upcoming merger announcement of a company,
  • Payout policy changes,
  • Updates on the earnings of the company.

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