Access over 20 million homework & study documents

Test 3 Spring 20

Content type
User Generated
Subject
Business
School
Miami University
Type
Homework
Rating
Showing Page:
1/7
CMR 302
TEST 3

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/7
Financing Operations
1. List an advantage and disadvantage of obtaining funds from “Angel Investors”
Advantages
They give startups funds needed to commence the business.
The terms and conditions of the funds are flexible.
The angel provides expertise knowledge and advice to the business.
Periodic repayment such as interest is not required as it is not a loan.
They are readily available and nondiscriminatory to industry.
Disadvantages.
The angle accepts the risks therefore, the fear of losing more money, make majority of them to be
unwilling to put in more funding when needed.
Some angles can be greedy and less patient, hence shift of focus from promotion of growth to money
generation.
The angel could require a high ownership stake/ equity into the company as a price for high
tolerance for risk, therefore losing decision power in your own business.
Some prefer investing in ventures out of their own expertise, as a risk diversification technique.
Therefore increasing the business vulnerability or risk for lack of extra knowledge and advice.
Funding can be slow at times.
2. Companies continue to receive funds in the Secondary Market? T F
False.
3. Identify a primary difference between common and preferred stock.
The primary difference between common and preferred stock is that common stock are shares held and
represent the ownership of the company, the holder of common stocks have the right to a share of the profit
as dividend, and a voting right and participate in the company’s general meetings, whereas, preferred stocks
are shares prioritized in dividends (profit share) distribution compared to the common stocks, they do not
enjoy any voting rights and do not attend general meetings. And in the event of liquidation, their claims are
discharged before the common stock claims
Breakeven Analysis

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/7

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 7 pages?
Access Now
Unformatted Attachment Preview
CMR 302 TEST 3 Financing Operations 1. List an advantage and disadvantage of obtaining funds from “Angel Investors” Advantages • They give startups funds needed to commence the business. • The terms and conditions of the funds are flexible. • The angel provides expertise knowledge and advice to the business. • Periodic repayment such as interest is not required as it is not a loan. • They are readily available and nondiscriminatory to industry. Disadvantages. • The angle accepts the risks therefore, the fear of losing more money, make majority of them to be unwilling to put in more funding when needed. • Some angles can be greedy and less patient, hence shift of focus from promotion of growth to money generation. • The angel could require a high ownership stake/ equity into the company as a price for high tolerance for risk, therefore losing decision power in your own business. • Some prefer investing in ventures out of their own expertise, as a risk diversification technique. Therefore increasing the business vulnerability or risk for lack of extra knowledge and advice. • Funding can be slow at times. 2. Companies continue to receive funds in the Secondary Market? T F False. 3. Identify a primary difference between common and preferred stock. The primary difference between common and preferred stock is that common stock are shares held and represent the ownership of the company, the holder of common stocks have the right to a ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents