8.

Question 8

Equity securities include all of the following: (Select all that apply.)

Warrants

Preferred stock

Convertible notes

Options

9.

Question 9

A cap on a convertible note is used to:

Secure the payment of the note upon liquidation

Establish the maximum pre-money valulation at which the note will convert

Put a limit on the maximum interest rate payable on the note

Put a value on the company

10.

Question 10

Which of the following is not a characteristic of Preferred Stock?

Preferred stock shareholders receive the greater of the original purchase plus accrued dividends OR a percentage of the liquidation proceeds on an as-converted basis in a standard liquidation of the company

Preferred stock is an equity instrument with some characteristic of debt

It is the financing vehicle of choice for venture capitalists

Anti-dilution provisions protect the preferred shareholders pro-rata interests