to be in the exit stage, a venture must have positive free cash flow.
A. |
True |
|
B. |
False |
|
C. |
Uncertain |
B. The correct answer is false.
Because only if the business has negative cashflows the venture capitalists will be forced to exit the business.
to be in the exit stage, a venture must have positive free cash flow. A. True...
A firm has positive free cash flow and a net dividend to shareholders that is less than free cash flow. What must it do with the surplus of the free cash flow over the dividend? Explain why it is common that firms with higher return on net operating assets (RONA) also have negative free cash flows. Also, explain why such firms tend to have above-average forward P/E ratio. P/B ratio is often said to indicate...
True or False? Many companies use free cash flow to estimate the amount of cash that would be available for unexpected opportunities.
QUESTION 29 A venture capitalist may work backwards to value an early stage venture. She starts with the objective of earning 10x on the capital investment. It then becomes necessary to find out how the company will achieve a valuation at IPO consistent with returning 10x to the VC. The factors that must be taken into a account include the size of the market and the ability of the founders to control a significant part of this market while maintaining...
Which of the following statements is not true, when describing the concept of free cash-flow? "Free cash-flow is the cash that is available after... a. Paying variable costs b. Paying fixed costs c. Paying taxes d. Investing in corporate projects e. Paying a dividend to stock holders
QUESTION 43 If a business has no liquid assets then negative cash flow from assets can not be sustained if the business does not have access to outside capital. O True ○ False QUESTION 44 The term sheet between a venture capital company and the founders of a venture give control of the company to the venture capitalists. O True ○ False QUESTION 45 According to UBER the "liquidity" of their network depends on the number of drivers in their...
Explain cash flow and is it important for a business to have a positive cash flow.
Which of the following is true of monopolistic competition? a. There is free entry and exit of firms in response to short-run profits. b. The industry comprises of very few firms. c. Firms in the industry produce homogenous products. d. The firms in the industry exhibit constant returns to scale in production e. In the long run firms earn positive economic profits.
If a firm has negative operating cash flow, negative investing cash flow, and positive financing cash flow, which of the following best describes the life stage of this firm? a mature firm. a declining firm. a bankrupt firm. a young startup. none of the above.
Charges are free to flow in an open circuit. True or False
Which of the following is true of the equity valuation model? a. Discounts free cash flow to the firm by the weighted average cost of capital b. Discounts free cash flow to equity by the cost of equity c. Discounts free cash flow the firm by the cost of equity d. Discounts free cash flow to equity by the weighted average cost of capital e. None of the above