Which of the Following Statements About Venture Capital Is False

question 6

Multiple Choice

Which of the following statements about venture capital is false?

• A) Entrepreneurs raise venture capital by selling shares of ownership in their business.
• B) Venture capital groups can often provide helpful management advice.
• C) Venture capital is used to finance rapid growth or large capital expenditures.
• D) Venture capital is a form of public equity financing.

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Definitions:

Discount Rate

The discount rate employed in discounted cash flow analysis to ascertain the present worth of future cash flows.

Annual Salary

The total amount of money that an employee earns in a year from their employer for their services.

Starting Bonus

A preliminary financial incentive given to a new employee as an enticement to join a company.

Interest Compounded

The process whereby interest is added to the principal sum, so that from that moment on, the added interest also earns interest, leading to exponential growth.