Exam 12: A Firms Sources of Financing

The basic factors that determine how a firm is financed include the following: the firm's past economic performance, the nature of its assets, the maturity of the firm, and the personal preferences of owner(s) with respect to the marketing mix.

The financing source which has the greatest advantage of speed is

A loan covenant is very unlikely to require

The public sale of a firm's common stock is regulated by the Securities and Exchange Commission.

Both wholesalers and equipment manufacturers/suppliers can be used as sources of funds.

For every firm, there is a "right" answer to the question of balancing debt and equity, and it is important that the small business owner find that balance.

Around 5% of the business plans reviewed by venture capitalists are funded.

Assets such as the quality of a firm's employees are considered tangible in nature and thus have substantial value as collateral.

One of the major sources of early financing is

Pro forma statements required by bankers include all of the following EXCEPT

A line of credit is the _____ amount of credit a bank will provide a borrower at any one time.

State and local governments are becoming less involved in financing new businesses.

Compared to firms that provide a good lifestyle for the owner but little in the way of attractive returns, a firm with potential for high growth and large profits has _____ possible sources of financing.

Small business investment companies (SBICs)

Capital financing with no established marketplace is financing from commercial banks.

Guaranty loans are

The tradeoffs that must be understood between debt or equity financing include the following except

Louise Piper plans to sell stock in her company in order to raise capital. One of the benefits of issuing stock as a source of funds is

Most startup investors limit their investing to firms that offer potentially high returns within a one-to-three-year period.

The assets most commonly used for security by asset-based lending companies are