Question: Private equity investors or venture capitalist like to invest in preferred stock rather than common stock of a company because: Multiple Choice Preferred stock, if
Private equity investors or venture capitalist like to invest in preferred stock rather than common stock of a company because:
Multiple Choice
Preferred stock, if properly structured, will incentivize the founder or original entreuprenuer original common stock holder to quickly grow the value of the company.
Preferred stock is a hybird security since it enjoys debtlike preferrence or liquidation rights and equity ownership.
Peferred stock, if properly stuctured, provides a reward rate of return that is matched with the investment risk.
All of the above
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