Which of the following best states the difference between seed capital and startup capital?
Seed capital is for research and planning while startup capital is for operating expenses.
Seed capital is provided by venture capitalists while startup capital is provided by banks.
Seed capital pays for new employees while startup capital pays for equipment and inputs.
Seed capital is for new businesses while startup capital is for businesses that are expanding.
Which of the following is an advantage of equity financing over debt financing?
Equity financing provides necessary capital more quickly than a loan.
The original partners can maintain total control of the company.
It's possible to raise more money than a loan can usually provide.
Debt financing is reserved for large corporations with a history of high profits.
Which of the following is generally not required to get a business loan from a bank?
A wealthy startup investor
A positive operating history
An expectation of profits
A solid business plan
Which of the following enterprises would be most likely to secure a large business loan?
A struggling national grocery store chain
A well-established real-estate developer
A one-year-old e-commerce company
A small database design company
Which of the following accurately describes an initial public offering (IPO)?
The government takeover of a business
The establishment of a new business
The first sale of stock to the public
The beginning of the productive process
Which of the following is one advantage for a company that goes public?
Management retains control of the company
The pressure to make profits is reduced
A greater labor pool is available for hire
Money is raised without going into debt
which of the following factors would be most likely to lead to a successful IPO?
Bullish market conditions
A history of good profits
A risky-sounding prospectus
A brand new approach to business
Which of the following does not help explain why the Google IPO was successful?
Investor confidence in Internet companies was high
The fact that Google was a household name
Google's history of borrowing large sums of money
The size of Google's market share of Internet searching
Did I get all these right?
1.A
2.C
3.A
4.B
5.D
6.A
7.C
8.B
Check them please
You got the following answers correct:
1. A - Seed capital is for research and planning while startup capital is for operating expenses.
2. C - It's possible to raise more money than a loan can usually provide.
3. A - A wealthy startup investor is generally not required to get a business loan from a bank.
4. B - A well-established real estate developer would be most likely to secure a large business loan.
5. D - The first sale of stock to the public accurately describes an initial public offering (IPO).
6. A - Money is raised without going into debt is one advantage for a company that goes public.
7. C - Bullish market conditions would be most likely to lead to a successful IPO.
8. B - The fact that Google was a household name does help explain why the Google IPO was successful.
However, there are a couple of incorrect answers:
For question 2, the correct answer is D - Debt financing is reserved for large corporations with a history of high profits.
For question 7, the correct answer is A - A history of good profits would be most likely to lead to a successful IPO.
So, you got 6 out of 8 questions correct.