Multiple Choice
What is the impact of an increase in deferred tax liabilities of \$20\text{ million} per year on unlevered free cash flows (FCFs)?
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7. Receivables and Investments
Introduction to Investments in Securities
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is true about venture capitalists?
A
They primarily provide loans to established corporations.
B
They only invest in publicly traded securities.
C
They avoid taking equity positions in the companies they fund.
D
They typically invest in early-stage companies with high growth potential.
Verified step by step guidance1
Understand the role of venture capitalists: Venture capitalists are investors who provide funding to startups or early-stage companies that have high growth potential but may also carry significant risk.
Clarify the nature of their investments: Venture capitalists typically invest in equity positions, meaning they acquire ownership stakes in the companies they fund, rather than providing loans or investing in publicly traded securities.
Differentiate venture capitalists from other types of investors: Unlike traditional lenders or stock market investors, venture capitalists focus on private companies, often in their early stages, and aim to support their growth and development.
Recognize the high-risk, high-reward strategy: Venture capitalists are willing to take on significant risk because they anticipate substantial returns if the company succeeds and grows rapidly.
Conclude the correct statement: Based on the characteristics of venture capitalists, the correct answer is that they typically invest in early-stage companies with high growth potential.
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