Lola is currently opening a series of restaurants around Coventry. She needs to raise £2million pounds from new investors. She decides to raise it in the following way. She issues a contract for the new investors promising a fixed amount of £2.5 million pounds next year if they invest now. If Lola does not pay the promised amount, investors would take over the restaurants. If she pays then Lola will keep full ownership. This contract is an example of: (a) A bank loan. (b) A corporate bond. (c) Private equity. (d) An Initial public offering. (e) A rights issue.
Lola is currently opening a series of restaurants around Coventry. She needs to raise £2million pounds from new investors. She decides to raise it in the following way. She issues a contract for the new investors promising a fixed amount of £2.5 million pounds next year if they invest now. If Lola does not pay the promised amount, investors would take over the restaurants. If she pays then Lola will keep full ownership. This contract is an example of: (a) A bank loan. (b) A corporate bond. (c) Private equity. (d) An Initial public offering. (e) A rights issue.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Lola is currently opening a series of restaurants around Coventry. She needs to raise £2million pounds from new investors. She decides to raise it in the following way. She issues a contract for the new investors promising a fixed amount of £2.5 million pounds next year if they invest now. If Lola does not pay the promised amount, investors would take over the restaurants. If she pays then Lola will keep full ownership. This contract is an example of:
(a) A bank loan.
(b) A corporate bond.
(c) Private equity.
(d) An Initial public offering.
(e) A rights issue.
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