How does a lender differ from a venture capitalist in return?
AReturn depends on growth
BShares in the exit gain
CLegal right to interest
DGets no repayment due
Answer & Solution
Correct answer: C. Legal right to interest
A lender is entitled to interest and repayment whether or not the business succeeds, unlike an equity investor.
Keep practising Sources of Finance
Browse all Sources of Finance questions for CA Inter, or explore more Financial Management topics.
Related questions
What is the usual outcome at the end of a finance lease, as in hire purchase?Under operating lease treatment, what happens to leverage ratios?Under the IFRS approach, when is a lease a finance lease?How does capitalising a finance lease affect the balance sheet?Who is typically the legal owner of the asset during a finance lease?Historically, how have many IPOs been priced relative to market demand?In a Dutch auction IPO, what do all successful bidders pay?A greenshoe option usually lets underwriters raise the offering by up to what percentage?