Example of insider trading could be _______.

Calling for information form, undertaking inspection, conducting inquiries and audits of the stock exchange.

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Some people manipulating the prices of securities for inflation or depressing the market price of securities.

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Managers or Directors of a company may know that company will issue Bonus shares to its shareholders at a particular time and they purchase shares from market to make a profit with bonus issue.

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All of the above

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Solution

The correct option is B Managers or Directors of a company may know that company will issue Bonus shares to its shareholders at a particular time and they purchase shares from market to make a profit with bonus issue.
Example of insider trading could be- Managers or Directors of a company may know that company will issue Bonus shares to its shareholders at a particular time and they purchase shares from market to make a profit with bonus issue.Insider trading can be defined as an illegal trade practice in stock exchange. Insider trading is the trading of a public company's stock or other securities by individuals with access to information which are confidential.

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Similar questions

Q. Consider the following statements:
1. The bonus shares shall not be issued in lieu of dividend,
2. A company may issue fully paid up bonus shares to its members out of its 'Capital Redemption Reserve Account'
3. A company may not issue bonus shares out of its 'Securities Premium Account'
Which of the above statement/s is are not correct?

The directors of a company want to modernise its plant and machinery by making a public issue of shares. They wish to approach stock exchange, while the finance manager prefers to approach a consultant for a new public issue of shares. Advise the directors whether to approach stock exchange or a consultant for new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

Q. The Directors of a Company want to modernise its plants and machinery by making a public issue of shares. They wish to approach stock exchange. While the finance manager prefers to approach a consultant for the new public issue of shares. Advise the directors whether to approach stock exchange or consultant for the new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

Corporate India has opened its purse strings to shareholders with interim dividends and bonus shares. At least 60 companies have declared an interim dividend or announced plans to do so in the first weeks of January. Also, around 12 companies have announced bonus share issues this month, about three times more than January 2006.

There is a range of things that a company can do for maximising shareholder value, and the dividend is the most direct and simple form of it. Ideally, companies need to balance the value of the stock for total shareholder returns.

This trend of dividends and bonuses is in synchronisation with the good profits being posted by companies. It is a way of rewarding shareholders. Many companies have also announced plans of bonus shares for their shareholders. Most of the companies who have already declared bonus issues or announced that they would be taking it up in their next board meeting are small or mid-sized companies.

What factors are considered while taking this decision?

Q. Assertion :Under the provisions of new Company Act 2013, a company may issue fully paid-up bonus shares out of its free reserves, security premium account and the capital redemption reserve account. Reason: According to the new provisions of Company Act, 2013, no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets.

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