‘Private equity’ is an important source of risk capital for smaller businesses.’

Required:

(a) Explain the term ‘private equity’ and discuss the main types of business that are likely to prove attractive to private equity firms.

(b) Identify the main issues that the board of directors of a business should take into account when deciding whether to use private equity finance.

(c) Identify and discuss the factors that a private equity firm will take into account when assessing an investment proposal.