Question

29. _________ is equity financing from an organization outside a company. This financing is provided in...

29. _________ is equity financing from an organization outside a company. This financing is provided in return for part ownership of the company who borrows the funds.

  1. Mutual funding
  2. Investment banking
  3. Banking control
  4. Venture capital
  5. Savings
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Venture Capital is the financing option through equity participation. The Venture Capital firm is an external financier to the borrowing company and provides the amount determined. In return, receives equity shares as the rate determined earlier through negotiations.

Hence the answer is fourth option: ‘Venture Capital’.

(Other options: Mutual funding is the process of collective investment in financial assets (shares, debt instruments etc)using the amount contributed by several individual investors. Investment banking is the advisory/ consultancy service and related matters provided mainly in capital augmentation. Banking control is the supervisory and regulatory function of Central Bank. Savings is the deposit product offered generally by banks wherein the individuals and households keep their periodical surpluses invested, in return for interest.)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A founder needs for his young company a USD 5,000,000 investment from an outside investor. The...
A founder needs for his young company a USD 5,000,000 investment from an outside investor. The current number of shares outstanding in the hands of the founder is 1,000,000 shares. After a few years of working after your graduation at MSUM, you have become a successful professional and a USD 5 million is nothing to you. You consider the venture attractive since both, you and the founder, think that the venture can reach a level of annual earnings of USD...
The founders of a startup company have 5 million shares of common stock. To raise much...
The founders of a startup company have 5 million shares of common stock. To raise much needed capital the company goes through a Series A funding round. The founders expect to raise $2 million from the venture capitalists who in exchange ask for a 25 percent equity stake in the company. What is the stock price? How many shares of preferred stock do the venture capitalists receive in exchange for their investment in the company?
8. An all-equity firm is considering financing its next investment project with a combination of equity...
8. An all-equity firm is considering financing its next investment project with a combination of equity and debt. The asset beta for the firm as a whole is 1.2 (recall that this is the same as the equity beta for an all-equity firm, but not the same as the equity beta for a “levered” firm). Assume the average rate of return on the market is 6% and the risk-free rate is 1%. The cost of debt for the company is...
1.One means of raising equity financing for shopping center development is to sell parcels to anchor...
1.One means of raising equity financing for shopping center development is to sell parcels to anchor tenants or outparcels, or “pad sites” to fast-food restaurants, banks, and similar businesses after the center plan has taken shape. TRUE OR FALSE? 2.Office developments are categorized by class, building type, use and ownership, and location. TRUE OR FALSE? 3.Transferable development rights (TDRs) allow for the sale of development rights on a property from one owner to another. TRUE OR FALSE? 4.Small developers are...
John’s Barley Mill is considering adding a new production line to its existing facility. The new...
John’s Barley Mill is considering adding a new production line to its existing facility. The new production line will increase John’s sales revenue by $1 million/year. Sales of this offering have a gross margin of 70% and the cost of operating the new line is another 50% of sales on an annual basis. The company does not have any excess capital to invest in this project beyond what they acquire through the debt/equity associated with this project. The new production...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her life had changed in the past few months. Since launching Homeplate a little over a year ago, she had grown from a one-person operation preparing meals in the local YMCA kitchen to a fast growing meal preparation and delivery service, with nearly 3,000 regular customers and strong growth and profit potential. Lexi had gone through raising a seed round of capital and was now...
Which of the following statements is NOT CORRECT? a. When new stock is issued, the company...
Which of the following statements is NOT CORRECT? a. When new stock is issued, the company pays an investment bank to handle the expenses and fees involved with selling the stock. These expenses are called flotation costs. b. Flotation costs reduce the amount of capital the firm receives from a new stock issue. The company must make each dollar of the new issue work harder, so new investors earn their required rate of return. The new stock has a higher...
5. The financing provided for start-up, often high-risk, private business enterprises is called: A. Venture capital....
5. The financing provided for start-up, often high-risk, private business enterprises is called: A. Venture capital. B. Junk bonds. C. Flotation costs. D. Initial public offerings. E. Financial futures. 6. When a firm is operating with the optimal capital structure: I. the debt-equity ratio will also be optimal. II. the weighted average cost of capital will be at its minimal point. III. the required return on assets will be at its maximum point. IV. the increased benefit from additional debt...
The following are not business combination transactions of entities under common control The parent company exchanges...
The following are not business combination transactions of entities under common control The parent company exchanges its ownership in a portion of the net assets of its subsidiary for additional shares issued by another subsidiary. The parent company transfers a portion of the net assets of its subsidiary to the assets of the parent The parent company purchases the net assets or part of the ownership rights of non-controlling shareholders The parent company transfers part of its ownership rights in...
1.) A firm needs to take flotation costs into account when it is raising capital from...
1.) A firm needs to take flotation costs into account when it is raising capital from ___________ (retained earnings / issuing new common stock) True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. 2.) If a firm needs additional capital from equity sources once the retained earnings breakpoint is reached, it will have to raise the capital by issuing new common stock. a.) False: Firms raise capital from retained earnings only...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT