B
CORRECT DETAILED ANSWERS
Harvesting is best described as? - Capturing value in the form of cash flows, reducing risks, and creating
future options.
Yongmei's company is the target of an question by a larger company that will finance the deal primarily
through taking on a larger debt. This type of deal is called? - A leveraged Buyout
The best definition of value of creation by a company is: - Its return is greater than the investors'
opportunity cost of funds.
Jacques has just taken a big step in growing his company. He obtained angel financing and all are
optimistic that the company can be harvested successfully in a few years through a sale or stock offering.
The best advice you can give Jacques about running the business is? - Build a solid company that will be
successful in the long haul, but also think about harvest options as you build.
A good retirement plan for an entrepreneur: - Is diversified such that it includes both the harvest and
other types of investments not tied to the company's success.
A/n ___ uses retirement funds of people who work for the company to buy company stock and hold it in
trust until it is distributed to their retirement plans. - Employee Stock Ownership Plan (ESOP)
The ____ is the rate that could be earned on an investment of a similar risk. - Opportunity Cost Of Funds
A/n ____ occurs when a private firm sells its shares for the first time to the public. - Initial Public Offering
(IPO) Harvesting is best described as? - Capturing value in the form of cash flows, reducing risks, and
creating future options.
Yongmei's company is the target of an question by a larger company that will finance the deal primarily
through taking on a larger debt. This type of deal is called? - A leveraged Buyout
The best definition of value of creation by a company is: - Its return is greater than the investors'
opportunity cost of funds.
Jacques has just taken a big step in growing his company. He obtained angel financing and all are
optimistic that the company can be harvested successfully in a few years through a sale or stock offering.
The best advice you can give Jacques about running the business is? - Build a solid company that will be
successful in the long haul, but also think about harvest options as you build.
A good retirement plan for an entrepreneur: - Is diversified such that it includes both the harvest and
other types of investments not tied to the company's success.