pls answer a b and c I.Larry (LP) invests $125,000 in a VC fund run by Gary (GP). Gary is under 2/20compensation plan. Dividends are cumulative but interest does not accrue on thedividends. Gary invests $125,000 in a firm run by Edwin (Entrepreneur). The pre-money value of Edwin's firm is $450,000. In five years, the firm sells for$4,000,000.a) What is the payoff to Edwin the Entrepreneur?b) What is the payoff to Gary the General Partner?c) What is the payoff to Larry the Limited Partner?

Introduction In Entrepreneur, one takes on the risk of providing capital for and overseeing a…

Answered: I. Larry (LP) invests $125,000 in a VC…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 28P

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Wu of Troy, New York, has $5,000 that he wants to invest in the stock market. Ji is in college on a scholarship and does not plan to use the $5,000 or any dividend income for another five years, when he plans to buy a home. He is currently considering a small company stock selling for $25 per share with an EPS of $1.25. Last year, the company earned $900,000, of which $250,000 was paid out in dividends. 1, What classification of common stock would you recommend to Ji? 2, Calculate the P/E ratio and the dividend payout ratio for this stock. Round your answers to the nearest whole number. 3, Given this information and your recommendation, would this stock be an appropriate purchase for Ji? Why or why not?
John owns 6,000 shares of KLM stock, 2,000 shares of BBT Mutual fund, and 10,000 shares of Centex Corporation. Her 1099-DIV forms from these investments showed the following: KLM: $3 per share distribution all reinvested in KLM BBT Mutual fund: $5 per share distribution, $1 of which represents a capital gain distribution; none of this is reinvested. Centex: $2 per share distribution, all of which represents a return of capital. How much must John include in his income in the current year? a. $40,000 b. $28,000 c. $48,000 d. $19,000
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Ted Paulson needed money to pay for unexpected medical bills. To obtain $8,700, he decided to sell some of his shares in the Ridgemoor Capital Appreciation Fund. When he called the investment company, he was told that the following fees would be charged to sell his B shares: Ridgemoor Capital Appreciation Fund Fees First year 5 percent withdrawal fee Second year 4 percent withdrawal fee Third year 3 percent withdrawal fee Fourth year 2 percent withdrawal fee Fifth year 1 percent withdrawal fee If he has owned the fund for 16 months and withdraws $8,700 to pay medical bills, what is the amount of the contingent deferred sales load?
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Two years ago, Lizzy Martinez, from Atlanta, GA, invested $1,000 by buying 125 shares (8$ per share NAV) in the Can't Lose Mutual Fund, an aggressive growth no-load mutual fund. Last year, she made two additional investments of $500 each (50 shares at $10 and 40 shares at $12.50). Lizzy reinvested all of her dividends. So far, the NAV for her investment has risen from $8 per share to $13.25. What were the proceeds from Lizzy's sale of the 60 shares
Bob invested 3,000 and borrowed 3,000 to purchase shares in Verizon communications. At the time of his investment Verizon was selling for 47 a share. If bob paid a 30 commission how many shares could he buy if he used only his own money and did not use margin?

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