Instead of Issuing Securities, Artificial Intelligence Inc

question 133

Multiple Choice

Instead of issuing securities, Artificial Intelligence Inc. pursues other sources of funds. To obtain venture capital financing, the firm will most likely

• A)borrow funds to be returned on a designated maturity date.
• B)give up a share of its ownership.
• C)pool funds to invest in a business venture.
• D)pay periodic dividends.

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Definitions:

Leverage Ratio

The leverage ratio is a financial metric indicating the level of debt used by a business to finance its assets, often used to assess financial risk.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

ROA

Return on Assets, a financial ratio that indicates how efficiently a company is using its assets to generate profit.