Which of the Following Is Not an Advantage of a Small

question 27

Multiple Choice

Which of the following is not an advantage of a Small Company Offering Registration (SCOR) ?

• A)Access to a huge pool of equity financing without the expense of full registration with the SEC
• B)The ability to raise up to $1 million in a one-year period
• C)The ability to make the offering in several states at once
• D)The ability to market the offering through advertisements and to sell to investors with no restrictions and no minimums

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Definitions:

Natural Monopoly

A market condition where a single firm can provide a good or service at a lower cost than any potential competitor, often due to economies of scale.

Economies of Scale

Economies of scale occur when increasing the production scale leads to a decrease in the long-term average costs, often due to more efficient use of inputs.

Exclusive Franchise

A legal agreement granting one party the sole right to sell or distribute a company's products or services in a particular market area.

Conglomerate Merger

involves the combination of firms that operate in unrelated business areas, aiming for diversification and reduced business risk.