Which one of the following best describes a private placement?

Question

Quizplus · Accepted Answer

A private placement is a long-term loan by a limited number of investors. It is a form of financing typically used by companies that cannot or choose not to raise money through public markets.

The other choices do not accurately describe a private placement. Choice A describes interim financing, which is typically short-term. Choice C describes a direct business loan, but does not specify whether it is private or public. Choice D describes a loan from the original founder, but again does not specify whether it is private or public. Choice E describes a new equity issue, which is not a loan and does not necessarily have to be a private placement.

Which One of the Following Best Describes a Private Placement