Which of the Following Statements Is Incorrect Regarding Equity Funding

question 35

Multiple Choice

Which of the following statements is incorrect regarding equity funding?

• A) Equity investors expect to get their money back, along with a substantial capital gain, through the sale of their stock.
• B) Angel investors are a common source of equity funding.
• C) Equity funding is not a loan.
• D) Equity investors are very demanding.
• E) Equity investors fund the majority of the plans they consider.

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Definitions:

Regular Cash Dividend

A payment made by a firm to its shareholders from its profits in the form of cash.

Cyclical Dividend Policy

A dividend payment strategy by companies that varies depending on the economic cycle, with higher payouts during economic prosperity and lower or no dividends during downturns.

Economic Growth

An increase in the production and consumption of goods and services, indicating a country's economic health.

Manufacturing Firm

A business that produces goods through the use of labor, machines, tools, and chemical or biological processing or formulation.