Unit 9: Raising Finance

Question 1

What does a collateral mean?

Answer 1

A collateral is something guaranteed as security for repayment of a loan, to be lost in the event of a default; usually a house (TH=หลักประกัน)

Question 2

What does principal mean?

Answer 2

Principal is the original sum invested or lent (TH=เงินต้น)

Question 3

What do installments mean?

Answer 3

Installments are the sum of money due as one of several equal for something, spread over an agreed upon period of time (TH=ค่างวดเงินผ่อน)

Question 4

What does equity mean in terms of raising finance?

Answer 4

Raising finance by equity means to sell part of your company in return for money.

Question 5

What does seed capital mean?

Answer 5

Seed capital is the money allocated to initiate a project (TH=เงินทุนตั้งต้น)

Question 6

What do blue-chip stocks mean?

Answer 6

Blue-chip stocks are stocks in the very best companies.

Question 7

What is a pawnbroker?

Answer 7

A pawnbroker is an individual or business that offers secured loans to people with items of personal property used as collateral

Question 8

What is a pawnbroker?

Answer 8

A pawnbroker is an individual or business that offers secured loans to people with items of personal property used as collateral

Question 9

What are business angels?

Answer 9

Business angels are affluent individuals who provide capital for a business start-up, usually in exchange for ownership equity.

Question 10

What is an exit strategy?

Answer 10

An exit strategy is a preplanned means of removing oneself from a situation that is likely to become difficult or unpleasant.

Question 11

What does insolvency mean?

Answer 11

Insolvency means the inability to pay one’s debts or when the liabilities exceed the assets.

Question 12

What is an indemnity?

Answer 12

Indemnity is the security against a loss or other financial burden; TH = การชดเชยค่าเสียหาย

Question 13

What is the difference between administration and liquidation in finance?

Answer 13

Administration is when a temporary staff gives administrators time to devise a rescue strategy; goal = to protect from creditors

Liquidation is the sale of company assets to make payments to creditors on a proportional basis.

Question 14

What does the phrase “money talks” mean?

Answer 14

It means money has influence.

Question 15

What does the phrase “don’t put all your eggs in one basket” mean?

Answer 15

It means don’t invest all your money into one thing.

Question 16

What does the phrase “you have to speculate to accumulate” mean?

Answer 16

It means you need to take a risk to make money.

Question 17

What does the phrase “don’t throw good money after bad” mean?

Answer 17

It means don’t keep investing after you’ve lost.

Question 18

What does the phrase “lend your money and lose a friend” mean?

Answer 18

It means don’t lend you money to friends.

Question 19

What does the phrase “out of debt, out of danger” mean?

Answer 19

It means don’t borrow money.

Question 20

What does the phrase “he who pays the piper calls the tune” mean?

Answer 20

It means if you’re paying, you make the decisions.

Question 21

What does the phrase “beggars can’t be choosers” mean?

Answer 21

It means if you don’t have money, you can’t choose.

Question 22

What does bankruptcy mean?

Answer 22

Bankruptcy is a legal procedure for liquidating a business that cannot fully pay its debts out of its current assets.

Question 23

What are the two types of bankruptcy?

Answer 23

1) Voluntary bankruptcy - filed by the insolvent debtor
2) Involuntary bankruptcy - forced on court orders issued on creditor’s petition

Question 24

What are the two types of insolvency?

Answer 24

1) Cash insolvency - not enough cash; usually does not result in bankruptcy
2) Assets insolvency - not enough assets; liquidation is almost certain

Question 25

What is the difference between receivership and administration?

Answer 25

They are the same.

Question 26

What is registered capital?

Answer 26

Registered capital is the amount of capital a company is officially allowed to get from selling shares.