Fin 317 Wk 11 Final Exam Part 2 - All Possibstionsle Que

FIN 317 WK 11 Final Exam Part 2 - All Possibstionsle Que

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FIN 317 WK 11 Final Exam Part 2 - All Possible Questions

True–False Questions

            1.  Despite the high risk and costs of using a facilitator or up-front fee solicitor to obtain financing, many start-ups never-the-less seek them as a source of funds due to the length of time it takes to raise new funds.

            2.  Collateral plays an important role in determining the willingness to lend and the amount and terms of the loan, making it the most important factor in the lending process.

            3.  Commercial loan officers have the expertise to project new venture’s business successes, and thus are as willing to make funds available to entrepreneurs on the same basis as other businesses.

            4.  Because investors and commercial lenders both seek returns on the funds given to start-up firms, entrepreneurs can obtain financing as easily from either source.

            5.  Because of loan restrictions, obtaining funding from commercial lenders is prohibitive for entrepreneurs.

            6.  Unlike traditional commercial banks, venture banks typically provide debt to start-ups that have already received equity financing from professional venture capital firms.

            7.  Among start-ups, it is widely understood that bank debt (outside of  Small Business Administration loans), is not a very realistic source of financing for ventures with less than two years operating results.

            8.  Compensation received by commercial loan officers makes them more likely to finance early-stage ventures.

            9.  Warrants allow lenders to buy equity at a specified price.

            10.  Warrants are a debt instrument frequently used by commercial banks when financing entrepreneurial ventures.

            11.  Credit...