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:

Law of Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Retained Earnings

Profits that a company keeps after dividends are paid, often used for reinvestment, paying off debt, or building reserves.

Venture Capital

Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Basic Research

Scientific study aimed at increasing our fundamental understanding and knowledge rather than developing new applications or products.