Question

question 23 (2.5 points)
davina, a salesperson for cell phone corporation, learns that the firm will increase the dividend it pays to shareholders. she buys 10,000 shares of company stock. when the dividend is announced to the public and the price of the stock increases, she sells his shares for a profit. she would not be liable for insider trading if the information about the dividend was

a) available to the public before she bought the stock.

b) forward - looking when she bought the stock.

c) available to the public after she bought the stock.

d) material when she sold the stock.

question 24 (2.5 points)
crunch potato chip company and party pretzels, inc. decide to combine. marlene, a crunchy shareholder, is dissatisfied with the price that she will receive for her stock. in the absence of fraud or other illegal conduct, marlenes exclusive remedy is to

a) refuse to agree to the deal, which cannot then proceed.

Explanation:

Question 23

Insider trading involves using non - public, material information. If the dividend information was public before Davina bought the stock, she didn't use insider (non - public) info. Option b: forward - looking info alone doesn't determine insider trading. Option c: using info before public release is insider trading. Option d: materiality at sale isn't the key; the key is if info was public when trading. So the correct option is about public info before purchase.

In a merger, a dissenting shareholder's exclusive remedy (in absence of fraud) is usually appraisal rights (though options aren't fully shown, but option a is wrong as a single shareholder's refusal doesn't stop a merger with proper procedures). Assuming standard corporate law, the correct approach would be based on appraisal rights or other legal remedies, but from the given option a, it's incorrect as a merger can proceed with majority approval despite a shareholder's refusal. (Note: Since options are partial, but based on the given option a, it's wrong. If we assume the missing options include the correct one like seeking appraisal, but from the given, we can analyze option a: A single shareholder's refusal doesn't halt a merger that has proper corporate approval (e.g., majority shareholders agree), so option a is incorrect.)

Answer:

a) available to the public before she bought the stock.

Question 24 (partial, but based on corporate law for mergers)