Insider trading; transaction effects to beta of company
food processing company, and you own stock in that company. Recently, you
worked on an assignment during which you found out the company was going to
take on additional debt and start an airline. You are thinking about selling
your stock prior to the announcement.
a. What do you think will happen to the beta for this
company after the announcement?
b. What do you think will happen to the price of the stock
given your answer to part a?
c. Ethically, what are the consequences if you decide to
sell before the announcement and if you do not sell?
d. What would you do?
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