Module 1: Long Answer Questions

For students

Last updated: 30/01/2026 19:01

The questions are based on or inspired by the following references:

• Berk & DeMarzo, Corporate Finance, 5th ed. (2020)
  
• Brealey & Myers, Principles of Corporate Finance, 13th ed. (2020)

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⚠️ These exercises are powered by AI-assisted technologies and may contain occasional formatting or logic errors. Please report any issues you encounter so I can improve the experience.

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📘 Part 1 (until Midterm)

Module	Chapter
1	ch23

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Answer the following questions based on the discussions in class.

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Q1.

Explain the main differences between angel investors, venture capital funds, and private equity firms.

Q2.

What is IPO underpricing, and why does it occur? Who benefits and who loses from this phenomenon?

Q3.

Compare an Initial Public Offering (IPO) to a Seasoned Equity Offering (SEO). Discuss their pricing process, expected market reactions, and main types of SEO.

Q4.

As the founder of a startup negotiating with a venture capital fund, what are the key terms you should consider in the funding agreement? Why are these terms important?

Q5.

What are the main benefits and costs of going public through an IPO from the perspective of the company?