Luke, a salesperson for Mountaintop Coffee, Inc., learns that Mountaintop will increase the dividend it pays to shareholders. Luke buys 10,000 shares of Mountaintop stock. When the dividend is announced to the public and the price of the stock increases, Luke sells his shares for a profit.

Required:

1. Luke would not be liable for insider trading if the information about the dividend was .

available to the public before he bought the stock

Explanation:

Insider trading is defined as illegal buying or selling of a companie's securities based on private and non public information about the performance of the security.

The perpetrator transacts in the sale of the security in order to turn a profit.

In this scenario where Luke had information that Mountaintop will increase the dividend it pays to shareholders and buys 10,000 shares of Mountaintop stock. When the dividend is announced to the public and the price of the stock increases, Luke sells his shares for a profit.

If the information Like got is from a source available to the public then he is not liable for insider trading

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