- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 38. Private Equity Investments
- Subject 2. Valuation characteristics and issues in venture capital vs. buyout
CFA Practice Question
Examples of dilution of ownership in venture capital transactions include:
II. Issuance of stock options to the management.
III. Issuance of stocks to the management.
I. A financing round.
II. Issuance of stock options to the management.
III. Issuance of stocks to the management.
Correct Answer: I, II and III
User Contributed Comments 4
| User | Comment |
|---|---|
| alai2008 | if the options are in the money there is capital dilution if they are out-of the money there is potential dilution |
| bablig | Can some one explain this in details pls |
| arudkov | each ot the answers will lead 2 decrease of %% of stock of initial investor. |
| birdperson | all lead to more equity being issued, and consequently dilution |