Question

In: Accounting

Examine the following statements and tick the right answer – The term sheet is a legal...

Examine the following statements and tick the right answer –

The term sheet is a legal agreement between the founders of a company and the investors.-YES /NO

The term sheet is a legal agreement between the company and its founders to accept PE investment. - YES /NO

The term sheet is a legal agreement between the company and the PE investors. -YES/ NO

The term sheet is a list of terms and conditions based on which investors are agreeable to invest in a company. - YES /NO

Can the board of directors of a company decide to issue shares to investors for financing the company with PE investment? - YES /NO

If the investors mention an acceptable valuation of the company in the term sheet, can the shareholders of a company decide to reject the of fereven if the board of directors is willing to accept it? - YES /NO

Aftertheconclusionofexecutionofagreementsandsatisfactionoftheconditionsprecedent to investment, the funds will be made available to the company from the investors -YES

/ NO

Eveniftheduediligencefindingofacompanyarenotsatisfactory, can investors decide to go ahead with the transaction? - YES /NO

If two companies are theoretically identical in all financial parameters, can an investor value them differently? - YES /NO

Can the post-money value of a company be higher than the pre-money value if the company has no debt in its balance sheet? - YES /NO

Expert Solution

The term sheet is a legal agreement between the founders of a company and the investors.-NO

The term sheet is a legal agreement between the company and its founders to accept PE investment. - NO

The term sheet is a legal agreement between the company and the PE investors. -YES

The term sheet is a list of terms and conditions based on which investors are agreeable to invest in a company. - YES

Can the board of directors of a company decide to issue shares to investors for financing the company with PE investment? - NO

If the investors mention an acceptable valuation of the company in the term sheet, can the shareholders of a company decide to reject the of fereven if the board of directors is willing to accept it? - YES

After the conclusion of execution of agreements and satisfaction of the conditions precedent to investment, the funds will be made available to the company from the investors -YES
Even if the due diligence finding of a company are not satisfactory, can investors decide to go ahead with the transaction? - NO
If two companies are theoretically identical in all financial parameters, can an investor value them differently? - YES

Can the post-money value of a company be higher than the pre-money value if the company has no debt in its balance sheet? - YES

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