Which of the Following Sets of Characteristics Places a Startup

question 71

Multiple Choice

Which of the following sets of characteristics places a startup in the strongest position to apply for equity funding?

• A) Weak cash flow, high leverage, low-to-moderate growth, unproven management
• B) Strong cash flow, low leverage, audited financials, good management, healthy balance sheet
• C) Unique business idea, strong cash flow, low-to-moderate growth, broad market
• D) Strong cash flow, high leverage, low-to-moderate growth, unproven management
• E) Unique business idea, high growth, niche market, proven management

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Definitions:

Transitory Earnings

Earnings that are considered to be non-recurring or not indicative of the company's future earning potential.

Permanent Earnings

Profits generated by a company that are expected to continue in the future, excluding one-time events or transactions.

Implied Share Price

The calculated value of a company's share based on future earnings, cash flows, or market expectations.

Implied Share Price

The theoretical price of a company's stock derived from certain financial models, reflecting the market's expectations of its future cash flows or earnings.