Larry (LP) invests $125,000 in a VC fund run by Gary (GP). Gary is under 2/20...
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Larry (LP) invests $125,000 in a VC fund run by Gary (GP). Gary is under 2/20 compensation plan. Dividends are cumulative but interest does not accrue on the dividends. 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. Each part below is worth 5 marks. Answer the following: What is the payoff to Edwin the Entrepreneur? What is the payoff to Gary the General Partner? What is the payoff to Larry the Limited Partner? Larry (LP) invests $125,000 in a VC fund run by Gary (GP). Gary is under 2/20 compensation plan. Dividends are cumulative but interest does not accrue on the dividends. 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. Each part below is worth 5 marks. Answer the following: What is the payoff to Edwin the Entrepreneur? What is the payoff to Gary the General Partner? What is the payoff to Larry the Limited Partner?
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Answer rating: 100% (QA)
Payoff to Edwin the Entrepreneur Edwins firms premoney value was 450000 and Gary invested 125000 so ... View the full answer
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
Posted Date:
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