What does it mean to say that individuals as a group are net suppliers of funds for financial institutions? What do you think the consequences might be in financial markets if individuals consumed more of their incomes and thereby reduced the supply of funds available to financial institutions?

What does it mean to say that individuals as a group are net suppliers of funds for financial institutions?(Select the best answer below.)

A.

Individuals, as a whole, spend less than they make. The excess is invested, making it available for businesses and goverments.

B.

Individuals, as a whole, spend more than they make. The excess is provided for by businesses.

C.

Individuals, as a whole, spend less than they make. The amount that they spend is made available to businesses through financial institutions.

D.

Individuals, as a whole, spend more than they make. The excess is provided for by financial institutions.

Under Bradley's management, Robo-Tech has had a history of strong financial performance and solid growth potential, and well developed strategic vision and business plan. In order to help with the process of going public, Robo-Tech has hired a team of professional advisors, including lawyers, investment bankers, and accountants. These professionals will assist Robo-Tech with the registration, valuation, marketing, and placement processes. Robo-Tech will also have to decide on a listing exchange, where its shares will continuous trade after the public offering. Options include the New York Stock Exchange, the American Stock Exchange, a regional exchange, or the Nasdaq Market.

If all goes according plan, Robo-Tech will soon have access to a new valuable external financing resource, that it can use to finance it future growth potential.

To Do

a. For Robo-Tech, what are the advantages of being a publicly listed company?

b. For Robo-Tech, what are the disadvantages of being a publicly listed company?

c. If Robo-Tech prefers that its shares trade on a centralized exchange, what listing exchanges make the most sense for Robo-Tech and why?

d. Once Robo-Tech has sold its shares to the public does it care whether capital markets are efficient? In other words, how does market efficiency affect Robo-Tech?

a. For Robo-Tech, what are the advantages of being a publicly listed company? (Select all the choices that apply.)

A.

For a publicly-listed company shareholders provide cash without having an ability to take the company to bankruptcy court if a payment is not made.

B.

Being a publicly-listed company provides access to the money they need to grow.

C.

By going public, the owner can diversify their portfolio. In fact, without going public, it is difficult to determine the value of their firm.

D.

Going public gives the owner the chance to get a return for his or her hard effort.