Question 6.13: Why shouldn’t the managers simply release any inside informa...
Why shouldn’t the managers simply release any inside information to the market to allow the share price to rise and so make it possible to issue shares at a fair price?
There are at least two reasons why this may not be a good idea:
● It may be time-consuming and costly to persuade the market that the prospects of the business are better than current estimates. Investors may find it hard to believe what the managers tell them.
● It may provide useful information to competitors about future developments.
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