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:

Schedule M-1

is a tax form used by corporations to reconcile income reported on tax returns with income reported on financial statements.

Alternative Minimum Tax

A parallel tax system to the regular income tax that ensures that certain taxpayers pay at least a minimum amount of tax.

Corporations

Legal entities that are separate from their owners, capable of owning property, entering contracts, and being taxed.

Subject

A broad term typically referring to the main topic or person being discussed or studied.