Question

QUESTION 25

Halo Industries Inc. is a start-up. It is financed by private equity instruments for the purpose of helping the company in starting its operations, development of its product and to enable growth for the company. What kind of private equity instrument does the company have?

a. Growth capex

b.venture capital

c. Initial offering

Answer 1

a: Growth capex

Growth capex relates to capital expenditure that is incurred for the purpose of expanding its existing operations and furthering growth of the organization. It may be in the form of private equity instruments which are issued to raise capital and increase the value of the business over a period of time.

Venture capital is a subset of private equity and need not be for the purpose of growth. Initial offering refers to a public offer which is meets to the general public for raising capital and making the company public.