Many Venture Capitalists

question 38

Multiple Choice

Many venture capitalists

• A) prefer common stock in exchange for their investment.
• B) manage the liquidation of failed ventures.
• C) intend to cash out after five to seven years.
• D) insist on voting rights during stockholder meetings.

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Definitions:

Lend Out

The act of providing a loan or capital to another party with the expectation of being repaid, often with interest.

Repurchase Shares

The act of a company buying back its own shares from the marketplace, which can affect the company's stock value and earnings per share.

Weighted Average

A method of calculating an average whereby each component of the dataset contributes to the total average in proportion to its assigned weight.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and satisfy its investors.