An MNC may have to pay a higher price to acquire a target in countries that do not strictly enforce laws against insider trading.

Question

Quizplus · Accepted Answer

When insider trading laws are not strictly enforced, there is a higher possibility that confidential information might be leaked, which could lead to a higher purchase price for the target company. This is because the acquirer may have to pay a premium to compensate for the increased risk of information leakage.

An MNC May Have to Pay a Higher Price to Acquire