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    Ethical Principles and Business Behavior

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    You overhear your supervisor talking with her boss, who is a corporate officer, about a possible acquisition. You do not overhear the name, but you are pretty sure that you know which company it is. No one knows that you overheard this conversation, and your company has a history of acquisitions in the same market as the company you suspect. A recent story on the local news station mentioned several companies that were rumored to be acquired by your company. Your daughter has applied to a fancy prep school that would really give her an advantage in college admissions. Unfortunately, the school is beyond your financial capabilities. What should you do?

    a) Invest in the company you suspect, as you did not hear the name. Some have speculated that this company was a target anyway.
    b) Tell your spouse or partner that you have heard that your company will buy yet another company soon.
    c) Discuss your suspicions with your brother-in-law, who is a paralegal, and ask his advice as to whether or not you should invest.
    d) Call your broker and ask if any unusual activity has occurred in the stock of the company you suspect is the acquisition target. Because you have known the broker for several years, you trust his advice.

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    Solution Preview

    b) Tell your spouse or partner that you have heard that your company will buy yet another company soon.

    Here is why B is correct:

    The best choice in this case is B. No one knows that you have overheard the conversation and the information was not yet released to the public. If this is a publicly traded ...

    Solution Summary

    This solution provides the correct choice with explanation to the ethical principles question listed. Includes 1 reference.