Question Bank - Accountancy

Here's the question bank on all the accountancy topics.

Match List I with List II List I List IIA. Mezzanine Capital I. It is the speedy source of finance less regulated by the regulatory environment of debt and capital markets B. Private EquityII. It is long term capital embraced by the high network and high risk appetite investors.C. Global Depository Receipts III. It is an equity instrument issued in overseas markets and is listed and traded on bourses on an OTC basis.D. Venture CapitalIV. It refers to subordinated debt or preferred equity that allows firms to borrow additional capital beyond the levels lenders are willing to finance through the bank loans.Choose the correct answer from the options given below:

A.
A - II, B - IV, C - I, D - III
B.
A - I, B - III, C - IV, D - II
C.
A - IV, B - I, C - III, D - II
D.
A - III, B - II, C - I, D - IV

Solution:

List IList IIA. Mezzanine Capital It refers to subordinated debt or preferred equity that allows firms to borrow additional capital beyond the levels lenders are willing to finance through bank loans. Mezzanine capital is a more expensive financing source for a company than secured debt or senior debt. B. Private Equity It is the speedy source of finance less regulated by the regulatory environment of debt and capital markets. It is composed of funds and investors that directly invest in private companies or that engage in a buyout of public companies. C. Global Depository ReceiptsIt is an equity instrument issued in overseas markets and is listed and traded on bourses on an OTC (Over-The-Counter) basis. Global Depository Receipts are bank certificate issued in more than one country for shares in a foreign company. D. Venture CapitalCapital invested in start-up businesses/companies with a huge potential to grow in the future is known as Venture Capital. It is long term capital embraced by the high network and high-risk appetite investors. It generally comes from well-off investors, investment banks, and other financial institutions. Therefore, it is clear from the above explanation that option 3) is the correct answer.

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