1. Suppose you were playing golf with Al, the CEO of Sunbeam Corporation. Al mentions that his firm will be bought out at $40 per share in the next few weeks. The next morning, you look at the Wall Street Journal and find that Al’s firm is trading at $25 per share. Is it unethical for you to purchase Sunbeam stock? Would you be committing a crime?
2. What corporate governance mechanism ultimately puts corporate control in the hands of the shareholders?