Day: February 16, 2025

Which of the following statements about venture capital is most valid?

Select ONE answer:

1. Venture capital is a low risk and low return form of finance
2. Companies listed on major stock exchanges normally use venture capital to raise new finance
3. Venture capital can be appropriate for a management buyout
4. Venture capital normally takes the form of debt finance

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Venture capital can be appropriate for a management buyout. Venture capital is high risk and is not normally available to listed companies. It normally takes the form of equity finance, although it MAY take the form of debt finance.
4. Not correct

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