Weekend Sale Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: ac4s65

An unlisted software development company has recently reported disappointing results.

CIMA F3 Full Course Access
CIMA F3 View All Questions

An unlisted software development company has recently reported disappointing results. This was partly due to weak economic conditions but also because of its poor competitive position. The company has a number of exciting development opportunities which would enable it to achieve significant future growth. The company's growth potential has been hindered by its inability to secure sufficient new finance.

To enable the company raise new finance the Directors are considering working forwards an IPO in 10 years and accepting finance from a venture capitalist in order support in the intervening period.

The directors are keen to retain a controlling stake in the company and full representation on the board. They therefore require venture capitalists to provide funds as a mix of debt and equity and not soley equity finance.

Which THREE of the following are most likely to disrupt the directors' plans to use venture capital finance?

A.

Venture capitalists normally expect at least one seat on the board.

B.

Venture capitalists only provide equity finance and will therefore not be interested in providing a combination of debt and equity finance.

C.

The venture capital finance offered is much more expensive than expected.

D.

Venture capitalists normally expect an exit strategy sconer than the planned IPO in 10 years'time.

E.

Venture capitalists always require ownership of more than 50% of the shares in a company to ensure control.

F3 PDF/Engine
  • Printable Format
  • Value of Money
  • 100% Pass Assurance
  • Verified Answers
  • Researched by Industry Experts
  • Based on Real Exams Scenarios
  • 100% Real Questions
buy now F3 pdf
Get 65% Discount on All Products, Use Coupon: "ac4s65"
Next
A company plans to raise $12 million to finance an expansion project using a rights issue.
A company is currently all-equity financed.
Previous