ACCA FM · Chapter 10 · Question 11 of 11
A small unlisted company wishes to raise equity finance for expansion but cannot access the stock market. Which of the following sources is MOST appropriate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Business angels or venture capital
Explanation
Small and medium-sized entities often face a funding gap because they are too small for a stock market listing. Business angels (wealthy individuals) and venture capital providers invest equity in such businesses, usually seeking a significant stake and an exit route. Commercial paper is short-term debt available only to large, creditworthy companies.
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