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QUESTION 31 If Neon Co., a public company, sells private equity to a group of investors...

QUESTION 31

If Neon Co., a public company, sells private equity to a group of investors at a certain discount, the investors are engaged in:

a. Private investment in public equity.

b.Angel financing.

c.Leveraged buyout.

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Answer #1

Option a is correct option  Private investment in Public equity is correct option because this helps the company to raise funds from investors with regulations of SEC. It is a faster way of raising funds.

Option b Angel financing is wrong because here investment is done by a wealthy investor at initial stage before the company does public

Option c is wrong Leveraged buyout is a method of taking huge proportion of loans for mergers and acquisition of another company.  

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