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Questions and Answers
Which valuation approach is typically used for high growth companies in addition to probability-weighted scenarios?
Which valuation approach is typically used for high growth companies in addition to probability-weighted scenarios?
- DCF
- APV (correct)
- Comparables
- None of the above
Which of the following statements about high-growth companies is correct?
Which of the following statements about high-growth companies is correct?
- High-growth companies usually have organic revenue growth below 15% annually
- There is a universal method that fits all firms when projecting revenues (correct)
- High-growth companies are primarily mature firms
- High-growth companies always have a return on equity below 15% annually
Why is historical financial performance often misleading for high-growth companies?
Why is historical financial performance often misleading for high-growth companies?
- Long-term investments for high-growth companies tend to be intangible (correct)
- High-growth companies rarely issue shares
- High-growth companies do not have historical financial records
- Long-term investments for high-growth companies are always tangible
If a venture plans to issue an additional 25% of the total number of shares outstanding, what is the retention ratio for the current investors?
If a venture plans to issue an additional 25% of the total number of shares outstanding, what is the retention ratio for the current investors?
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In what order should the steps for valuing using the Venture Capital method be arranged?
In what order should the steps for valuing using the Venture Capital method be arranged?
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Which of the following is NOT mentioned as a characteristic of high-growth companies?
Which of the following is NOT mentioned as a characteristic of high-growth companies?
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