Question 6 is financing obtained from investment firms that specialize in financing small, high- growth companies and receive an ownership interest and a voice in management in return for their money. Debt financing Venture capital Equity financing Entrepreneurial capital O Corporate stock financing
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- As a micro-enterprise, which sets of financing are the most likely to be used? *A. Banks and venture capitalistsB. Tax holidays and leasesC. Retained earnings and convertible securitiesD. Public issuance of equity and debtQ48 Capital Structure refers to the following, except a. relationship between the various long-term sources of financing b. proper mix of debt and equity that helps to maximize the cost of capital c. helps the company perform better and return more to shareholders d. permanent financing of the company represented by long-term debt and equityWhat is the acceptable level of a company's indebtedness according to the financial leverage indicator a. The level based on the willingness of banks to provide loans b. Until the debt financing resource are cheaper than equity shareholder fund c. Under condition that the employed debt financing resources are increasing profitability of equity shareholder fund d. The level based on the willingness of shareholders to provide registered capital
- What is the impact on stockholders equity when a company uses equity financing as a source of funding?What is the impact on stockholders equity when a company uses debt financing as a source of funding?EXERCISE 6: SOURCES OF EQUITY FINANCING Match the following with the following equity investors: shareholders, risk capital investors, and government institutions. • Venture capitalist Common shareholders Export Development Canada • Angel investors • Preferred shareholders • Business Development Bank of Canada
- Question Financial leverage is the degree to which a firm or individual utilizes . A. borrowed money to pay wages B. borrowed money to pay dividends C. borrowed money to magnify equity earnings D. borrowed money to diminish equity earningsChapter 9 Homework Questions 1.What do we mean by financial structure? 2. What accounts in the statement of financial position are taken into consideration to calculate the cost of financing? 3. What is the meaning of economic value added (EVA)? What does it measure? Why is it important? 4. What is the purpose of calculating the cost of capital? 5. Differentiate between debt financing and common share financiHow does the financial market facilitate corporate finance and investment management needed?
- Expain why corporate finance is important to stakeholders?In Growth and Income Mutual Fund the companies make investment of their funds in a. Already proven companies b. Debentures of companies c. Finance companies d. Government securitiesp Media One of important indicators of the firm's ability to repay its loans. O Net working capital O Paid-in capital Retained earnings O Common equity