The alternative sources from which private companies can raise equity capital. Introduction: Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

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Answer 1

Question

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

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Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896

Answer 2

Question

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

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Answer 3

Question

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

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Answer 4

Question

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

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Answer 5

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

Answer 6

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

Answer 7

Chapter 23, Problem 1P

Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Answer 8

Expert Solution & Answer

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

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The alternative sources from which private companies can raise equity capital. Introduction: Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

To determine: The alternative sources from which private companies can raise equity capital. Introduction: Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Explanation of Solution

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Chapter 23 Solutions

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.