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Which of the following types of financing is typical for a business...

Which of the following types of financing is typical for a business in its mature stage?

  • a.)Bank loans
  • b.)Expansion venture capital
  • c.)Issuing bonds
  • d.)Seed money

Which of the following is an advantage of venture capital?

  • a.)Companies are obligated to repay venture capital funds, but at a much lower interest rate than a typical bank loan.
  • b.)Once a company receives venture capital funding, it is free to operate without further interference or scrutiny.
  • c.)Venture capital investors are guaranteed a return on their investment, although the return can vary from small to quite large.
  • d.)Although venture capital investments are typically high risk, they offer the potential for large returns for investors.

Determine whether the following statement is true of a capital lease, an operating lease, neither or both.


"A commercial financing agreement in which the finance company legally owns an asset, but the company leases it for a small part of the asset's life."

  • a.)Operating lease
  • b.)Both
  • c.)Capital lease
  • d.)Neither

What type of risk does a securities underwriter assume from the issuer?

  • a.)The risk that the price of the security will be set too low
  • b.)The risk that the issuer will default on the security
  • c.)The risk that the issuer will decide not to issue an IPO
  • d.)The risk that the security will underperform on the open market

Select one reason why a company would want to go public.

  • a.)To have access to a large magnitude of funding
  • b.)To benefit from investors who have expertise in the industry
  • c.)To undergo a leveraged buyout
  • d.)To reduce reporting and registration costs

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