When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will expect an ownership stake in the company in exchange for financial backing.
Venture capitalists are investors that provide capital to small businesses, young companies, and start-ups in exchange for an equal value share in the asset and expect ownership.
Small businesses do not have adequate capital and turn to venture capitalists for financial backing to expand and upscale their projects. Venture capitalists do not invest in budding businesses but choose businesses that have strong management and clear concepts and are ready to market their products. Due to uncertainty in the investment outcome, venture capitalists tend to have a high failure rate, but the investments that do pan out tend to be high yield.
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Answer:
1.
- The firm increases its dividend payout ratio.
This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
- The firm’s inventory turnover decreases, with no effect on the sales forecast.
If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
Answer:
In groups
Explanation:
Brainstorming is a problem-solving technique where members of a group are encouraged to contribute ideas that could solve the problem at hand. There are right or wrong proposals. Every suggestion is discussed extensively.
Brainstorming allows for deliberations on diverse possible solutions to a problem. The idea that is acceptable by all members is considered the group's decision.
I have to think again about this answer. I will get back! 2.22
The fact that the engineers and capital equipment managers have been laid off because of the economic downturn will increase<u> cyclical unemployment. </u>
<h3>What is cyclical unemployment?</h3>
This is a type of unemployment that happens when there is a loss of productivity in the economy.
The loss of jobs by these engineers and managers will therefore lead to more cyclical unemployment.
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