1. What factors determine the market price of a share of stock? Which of those factors were at work in the cases described above which dealt with the issue of stock prices?
2. What is the difference between debt and equity financing? Are the situations described above examples of debt or equity issues? Explain.
3. Consider the following statement: Insider trading should not be illegal. In a free-market economy, individuals who have the motivation and intelligence to gather information which allows them to make a lot of money should not be prevented from capitalizing on the information they have collected. Do you agree or disagree with the statement? Explain your reasoning.