Which of the Following Statements Regarding Exit Strategies Is FALSE

question 105

Multiple Choice

Which of the following statements regarding exit strategies is FALSE?

• A) An alternative way to provide liquidity to its investors is for the company to become a publicly traded company.
• B) An important consideration for investors in private companies is their exit strategy, or how they will eventually realize the return from their investment.
• C) Often large corporations purchase successful start-up companies. In such a case, the acquiring company purchases the outstanding stock of the private company, allowing all investors to cash out.
• D) Roughly 25% of venture capital exits from 2001-2005 occurred through mergers or acquisitions.

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Definitions:

Excise Tax

A tax imposed on specific goods, such as alcohol and tobacco, usually to discourage consumption or generate revenue.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

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Businesses or individuals dedicated to producing and/or distributing guitars to meet market demand.

The Road To Serfdom

A book by Friedrich Hayek warning of the danger of tyranny that inevitably results from government control of economic decision-making through central planning.