Question 1

The CAPLine Program makes short-term capital loans to growing companies needed to finance seasonal buildups in inventory or accounts receivable.

Accepted Answer

A) True 
 B)False

Question 2

The typical letter of intent states that the underwriter of a stock issue is not bound to the offering until it is executed, usually the day before or the day of the offering.

Accepted Answer

A) True 
 B)False

Question 3

Bank loans, retained earnings and credit cards are the most popular sources of small business financing.

Accepted Answer

A) True 
 B)False

Question 4

Capital is any form of wealth employed to produce more wealth.

Accepted Answer

A) True 
 B)False

Question 5

When the SBA makes a loan guarantee, banks are willing to consider riskier deals that they normally would refuse.

Accepted Answer

A) True 
 B)False

Question 6

Equity capital is also called risk capital because these investors assume the primary risk of losing their funds if the business fails.

Accepted Answer

A) True 
 B)False

Question 7

Bootstrap financing describes using internal, and often creative, methods of financing a company's need for capital.

Accepted Answer

A) True 
 B)False

Question 8

Publicly held companies must file periodic reports with the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 9

The purpose of the road show, coordinated by the underwriter of an initial public offering (IPO), is to promote interest in the IPO among potential syndicate members.

Accepted Answer

A) True 
 B)False

Question 10

Competing for Small Business Innovation Research Program (SBIR) loans is intense; only 7 percent of the small companies that apply receive funding.

Accepted Answer

A) True 
 B)False

Question 11

It is extremely difficult for a startup company with no track record of success to raise money with a public stock offering.

Accepted Answer

A) True 
 B)False

Question 12

The single most important ingredient in making a successful public offering is:

Accepted Answer

A)  choosing a capable underwriter. 
B)  negotiating a favorable letter of intent. 
C)  preparing a suitable registration statement. 
D)  filing Regulation D with the SEC. 
A)  choosing a capable underwriter. 
B)  negotiating a favorable letter of intent. 
C)  preparing a suitable registration statement. 
D)  filing Regulation D with the SEC.

Question 13

Selling the small company's accounts receivable outright to another business is called:

Accepted Answer

A)  collateral. 
B)  factoring. 
C)  trade credit. 
D)  a line of credit. 
A)  collateral. 
B)  factoring. 
C)  trade credit. 
D)  a line of credit.

Question 14

Explain the difference between equity capital and debt capital. What advantages and disadvantages characterize each?

Accepted Answer

• Equity financing-represents the person

Question 15

A margin loan:

Accepted Answer

A)  is one made by a commercial bank to a small business whose financial performance is marginal. 
B)  carries much higher rates because the collateral supporting it is so risky. 
C)  is a loan from an entrepreneur's stockbroker that uses the entrepreneur's investment portfolio as collateral for the loan. 
D)  must be repaid within 60 days or is considered to be in default. 
A)  is one made by a commercial bank to a small business whose financial performance is marginal. 
B)  carries much higher rates because the collateral supporting it is so risky. 
C)  is a loan from an entrepreneur's stockbroker that uses the entrepreneur's investment portfolio as collateral for the loan. 
D)  must be repaid within 60 days or is considered to be in default.

Question 16

Small business lending companies (SBLCs) make only intermediate and long-term SBA-guaranteed loans that many banks would not consider.

Accepted Answer

A) True 
 B)False

Question 17

The Patriot Express Program is an SBA program that is designed to assist veterans and their spouses who want to become entrepreneurs.

Accepted Answer

A) True 
 B)False

Question 18

In an initial public offering, the underwriter, or investment banker, serves to:

Accepted Answer

A)  advise and help prepare the company's registration statement for the SEC. 
B)  determine the price of the shares issued in the offering. 
C)  sell the company's stock through an underwriting syndicate of other investment bankers it develops. 
D)  All of the above 
A)  advise and help prepare the company's registration statement for the SEC. 
B)  determine the price of the shares issued in the offering. 
C)  sell the company's stock through an underwriting syndicate of other investment bankers it develops. 
D)  All of the above

Question 19

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Accepted Answer

A) True 
 B)False

Question 20

Disaster loans carry below-market interest rates and terms as long as ________ years

Accepted Answer

A)  10 
B)  30 
C)  40 
D)  50 
A)  10 
B)  30 
C)  40 
D)  50

The CAPLine Program makes short-term capital loans to growing companies needed to finance seasonal buildups in inventory or accounts receivable.

The typical letter of intent states that the underwriter of a stock issue is not bound to the offering until it is executed, usually the day before or the day of the offering.

Bank loans, retained earnings and credit cards are the most popular sources of small business financing.

Capital is any form of wealth employed to produce more wealth.

When the SBA makes a loan guarantee, banks are willing to consider riskier deals that they normally would refuse.

Equity capital is also called risk capital because these investors assume the primary risk of losing their funds if the business fails.

Bootstrap financing describes using internal, and often creative, methods of financing a company's need for capital.

Publicly held companies must file periodic reports with the Securities and Exchange Commission.

The purpose of the road show, coordinated by the underwriter of an initial public offering (IPO), is to promote interest in the IPO among potential syndicate members.

Competing for Small Business Innovation Research Program (SBIR) loans is intense; only 7 percent of the small companies that apply receive funding.

It is extremely difficult for a startup company with no track record of success to raise money with a public stock offering.

The single most important ingredient in making a successful public offering is:

Selling the small company's accounts receivable outright to another business is called:

Explain the difference between equity capital and debt capital. What advantages and disadvantages characterize each?

A margin loan:

Small business lending companies (SBLCs) make only intermediate and long-term SBA-guaranteed loans that many banks would not consider.

The Patriot Express Program is an SBA program that is designed to assist veterans and their spouses who want to become entrepreneurs.

In an initial public offering, the underwriter, or investment banker, serves to:

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Disaster loans carry below-market interest rates and terms as long as ________ years

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters

Exam 13: Sources of Financing: Debt and Equity

The CAPLine Program makes short-term capital loans to growing companies needed to finance seasonal buildups in inventory or accounts receivable.

The typical letter of intent states that the underwriter of a stock issue is not bound to the offering until it is executed, usually the day before or the day of the offering.

Bank loans, retained earnings and credit cards are the most popular sources of small business financing.

Capital is any form of wealth employed to produce more wealth.

When the SBA makes a loan guarantee, banks are willing to consider riskier deals that they normally would refuse.

Equity capital is also called risk capital because these investors assume the primary risk of losing their funds if the business fails.

Bootstrap financing describes using internal, and often creative, methods of financing a company's need for capital.

Publicly held companies must file periodic reports with the Securities and Exchange Commission.

The purpose of the road show, coordinated by the underwriter of an initial public offering (IPO), is to promote interest in the IPO among potential syndicate members.

Competing for Small Business Innovation Research Program (SBIR) loans is intense; only 7 percent of the small companies that apply receive funding.

It is extremely difficult for a startup company with no track record of success to raise money with a public stock offering.

The single most important ingredient in making a successful public offering is:

Selling the small company's accounts receivable outright to another business is called:

Explain the difference between equity capital and debt capital. What advantages and disadvantages characterize each?

A margin loan:

Small business lending companies (SBLCs) make only intermediate and long-term SBA-guaranteed loans that many banks would not consider.

The Patriot Express Program is an SBA program that is designed to assist veterans and their spouses who want to become entrepreneurs.

In an initial public offering, the underwriter, or investment banker, serves to:

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Disaster loans carry below-market interest rates and terms as long as ________ years

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters