Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A venture capital fund is organized as a limited partnership. The fees for the general partners are 2.0% of the beginning of year AUM and

A venture capital fund is organized as a limited partnership. The fees for the general partners are 2.0% of the beginning of year AUM and the carried interest is 20% of the excess of gross return over a threshold return of 9%. Given the AUM is $100 million at the beginning of the year and gross return over the year is 30%, what is the dollar amount of compensation earned by the general partners over the year? Express your answer in millions to two significant digits. $6.72 million should be expressed as 6.72.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Non Financial Managers

Authors: Gene Siciliano

1st Edition

0071413774, 978-0071413770

More Books

Students also viewed these Finance questions

Question

How do economists try to disentangle cause and effect?

Answered: 1 week ago