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Financing Entrepreneurial Ventures (pdf)

   

Added on  2021-04-21

6 Pages614 Words88 Views
Entrepreneurship
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Running head: FINANCING ENTREPRENEURIAL VENTURESFinancing entrepreneurial venturesName of the studentName of the universityStudent IDAuthor note
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1FINANCING ENTREPRENEURIAL VENTURES Table of ContentsMultiple Choice Questions.........................................................................................................2True or false...............................................................................................................................3Questions....................................................................................................................................3Reference....................................................................................................................................5
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2FINANCING ENTREPRENEURIAL VENTURES Multiple Choice Questions 1) An asset is a possession that has value in an exchange and can be classified asC) Tangible or intangible2) The financial asset is referred to as a ________ if the claim is a fixed dollarA) Debt Instrument3) Venture Capital transactions include which of the following?C) All securities that are purchased in the open market4) The closest approximation to the real, risk-free rate of interest isB) The short-term Treasury bill rate minus the inflation rate 5) The risk-free rate is equal to the real rate of return plusA) An expected inflation premium.6) The markets in general are paying a 2% real rate of return. Inflation is expected to be 3%.ABC stock commands a 6% risk premium. What is the expected rate of return on ABC stock?D) 11%7) For a venture capital Management, assume that the market thinks the real rate is 2.00%,the inflation premium is 2.70%, the bond's default risk justifies a premium of 2.10%, thematurity premium is 0.50%, and the liquidity premium is 1.10%. Since the cash flows aredenominated in Euros, the foreign-exchange rate premium is 1.50%. What is the discount rateto use when assessing the future cash flow of this VC?C) 9.90%
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