Source of Finance

1. What is the most common source of financing for small businesses?

• Bond

• Venture capital

• Crowdfunding

• Personal savings

2. 2. Which of the following statements is true about angel investors?

• They invest primarily in established companies with a proven track record.

• They require a high return on investment.

• They provide funding in exchange for equity or ownership in the company.

• They typically only invest in companies within their geographic area.

Which of the following is an example of debt financing?

• Selling stocks to an investor

• Borrowing money from a bank

• Offering shares of ownership to employees

• Reinvesting profits back into the business

What does ROI stand for?

• Return on insurance
  

• Rate of innovation
  

• Record of income
  

• Return on Investment

Which type of financing can be suitable for businesses that have seasonal revenues or irregular cash flows?

• Venture capital
  

• Equity financing
  

• Debt financing
  

• Mezzanine financing  

Retained earnings are:

• Earnings before paying dividends.

• Also known as cumulative earnings of the company after paying the dividends.

• Indication of a company’s liquidity position.

• Similar to cash in a bank.

Which of the following is true?

• Retained Earnings are cheaper than External Equity

• Retained Earnings are costlier than External Equity

• Equity Retained earnings are cost free

• External Equity is cheaper than Internal Equity

When a firm rents fixed assets from a third party

• Loan capital

• Debt factoring

• Leasing

• Net capital