Ferguson, Jon, Ruben and Ruby are equal and unrelated shareholders in Grisby Corporation, and all share in Grisby’s management. All agree to turn in their stock to the corporation for redemption at $250 per share if any one of them withdraws (by death or otherwise) from the business. Shortly thereafter, Ruben dies, and the estate redeems the Grisby stock at the agreed-upon price of $250 per share. Life insurance is used to provide all of the financing needed to carry out the buy-sell agreement.

Answer rating: 100% (QA)

ANSWER Life insurance has always been instrumental in providing families and loved ones with financial security upon the death of a breadwinner but it... View the full answer