Whole Food Case

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MBA-630 FINANCIAL MARKETS

FLOW OF FUNDS EXERCISE (CARSON COMPANY)

a. Carson Company was financed with an equity investment. It shows Carson is a overplus unit as they anticipate income from dividends and essential gains as the value of their cravat rises. Carson also has purchased Treasury securities that finance federal government expenditures as a superplus unit.

b. Carson Company is a deficit unit in borrowing fund from science companies and commercial banks which loan the funds to individuals and insignificant business. It is also a deficit unit because it has a credit streak with a bank.

c. Finance companies can facilitate Carson's expansion by providing extra loans.

d. Commercial banks can make easy Carson's expansion by providing additional loans or purchasing debt securities.

e. Carson Company already has loans from commercial banks and monetary theory companies. It also has a credit pursuit with a bank. If Carson uses its credit and again wants additional debt financing, financial institutions may be unwilling to provide funds. They may imagine Carson will default on its stipulation to repay the debt.

f. Security firms can help Carson by underwriting newly issued securities or selling the assuredness at the best price. Carson gang might consult security firms for corporate restructuring and they may help accomplish the changes in the capital erection by keeping under control the securities that are issued by Carson Company.

g. Carson Company have power to issue stock in the primary mart. Primary market provides new financing and funds to the issuer of securities. It may succor Carson Company to expand its operations.

h. Secondary place of traffic allows investors to trade existing securities. Carson Company has purchased Treasury securities and it be possible to sell the stock to other investors who crave to it in secondary market. It may have capacity for funds after selling its stocks.

i. If pecuniary markets were perfect, Carson would be in actual possession of had access to information and would...

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