Question 1

Valerie is beginning to think of harvesting her company. Which question should be asked first?

Accepted Answer

A)   Why does she want to harvest?
B)   What is the value of her firm?
C)   Does the firm have a leadership succession plan in the event that the firm sells?
D)   What will be the method of payment?E) A) and B)
F) A) and C)

Question 2

Dennis, the owner of a hardware store, has agreed to sell his business to another local hardware store owner. This transaction would likely be described as a sale to a _____ buyer.

Accepted Answer

A)   competing
B)   employee
C)   financial
D)   strategicE) A) and B)
F) A) and C)

Question 3

As Millard considers exiting or harvesting, he is concerned with:

Accepted Answer

A)   merely selling and leaving a business.
B)   the creation of future options.
C)   the establishment of a benchmark for firm risk.
D)   capturing future profitability.E) B) and D)
F) A) and D)

Question 4

The harvesting process encompasses more than just selling and leaving a business.

Accepted Answer

A) True 
 B)False

Question 5

Many entrepreneurs successfully grow their firms, but fail to develop an effective exit plan.

Accepted Answer

A) True 
 B)False

Question 6

The sale of a firm is solely about determining the value of a company.

Accepted Answer

A) True 
 B)False

Question 7

With a private equity placement, the firm's equity is sold in public equity markets, but the transaction is handled by a private investment banker.

Accepted Answer

A) True 
 B)False

Question 8

For value-creating firms, owners who decide to harvest by withdrawing cash flows should accelerate the process as much as possible for a company with growth needs.

Accepted Answer

A) True 
 B)False

Question 9

More recently, the bust-up leveraged buyout was replaced with the build-up leveraged buyout.

Accepted Answer

A) True 
 B)False

Question 10

Monica developed a business chain called Sun Rayz throughout the Midwest that offers only UV bed indoor tanning services. Solar POWer, an east coast United States indoor tanning chain, also offers UV beds and other sunless tanning options and has made an offer to purchase Sun Rayz. Explain this type of harvest transaction and what motivations Solar POWer may have for purchasing Sun Rayz.

Accepted Answer

This transaction would be considered a s...

Exam 13: Planning for the Harvest

Valerie is beginning to think of harvesting her company. Which question should be asked first?

Correct Answer
verified

For value-creating firms, owners who decide to harvest by withdrawing cash flows should accelerate the process as much as possible for a company with growth needs.

Correct Answer
verified

Correct Answer
verified
This transaction would be considered a s...
View Answer

With a private equity placement, the firm's equity is sold in public equity markets, but the transaction is handled by a private investment banker.

Correct Answer
verified

More recently, the bust-up leveraged buyout was replaced with the build-up leveraged buyout.

Correct Answer
verified

The harvesting process encompasses more than just selling and leaving a business.

Correct Answer
verified

Many entrepreneurs successfully grow their firms, but fail to develop an effective exit plan.

Correct Answer
verified

Dennis, the owner of a hardware store, has agreed to sell his business to another local hardware store owner. This transaction would likely be described as a sale to a _____ buyer.

Correct Answer
verified

The sale of a firm is solely about determining the value of a company.

Correct Answer
verified

As Millard considers exiting or harvesting, he is concerned with:

Correct Answer
verified

Exam 13: Planning for the Harvest

Valerie is beginning to think of harvesting her company. Which question should be asked first?

Correct AnswerverifiedShow Answer

For value-creating firms, owners who decide to harvest by withdrawing cash flows should accelerate the process as much as possible for a company with growth needs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThis transaction would be considered a s...View AnswerShow Answer

With a private equity placement, the firm's equity is sold in public equity markets, but the transaction is handled by a private investment banker.

Correct AnswerverifiedShow Answer

More recently, the bust-up leveraged buyout was replaced with the build-up leveraged buyout.

Correct AnswerverifiedShow Answer

The harvesting process encompasses more than just selling and leaving a business.

Correct AnswerverifiedShow Answer

Many entrepreneurs successfully grow their firms, but fail to develop an effective exit plan.

Correct AnswerverifiedShow Answer

Dennis, the owner of a hardware store, has agreed to sell his business to another local hardware store owner. This transaction would likely be described as a sale to a _____ buyer.

Correct AnswerverifiedShow Answer

The sale of a firm is solely about determining the value of a company.

Correct AnswerverifiedShow Answer

As Millard considers exiting or harvesting, he is concerned with:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
This transaction would be considered a s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified