After years of successful operations, the Firm has built up some idle cash. This has been bothering your Partner Michael Falzini for some time and he does not feel the firm is yielding all of the potential return on investment to the Partners that is possible. Two weeks ago, Michael Falzini sent an email to John Contigo and you suggesting an Investment Strategy for the idle cash and it was tabled for discussion at this upcoming Partners Meeting on 11-23-21. Michaels email presented two options: (1) Take a less than 10 % position in BioMed, an emerging leader in virus pathogen treatments and (2) Take a less than 10 % position in New Day Funding, a commercial finance company. The Price Earnings Ratios of the two alternatives are 19 and 25 respectively. Both, firms are long standing clients of the Contigo Group and your frim has intimate knowledge of their strategies and new products coming to market, which Michael sees as huge positive to minimize investment risk. Michael has proposed two forms of investment, (1) A direct investment by the Firm with the securities registered in the name of the 3 Partners and (2) Forming a new LLC, funded by the Firm, but owned by the Partners Spouses and having this new LLC invest in the securities.

1. Complete a price Earning Analysis for the two investment options.
2. What are the advantages of the Michael Falzinis proposed Investment Strategy
3. What are the disadvantages or potential concerns with the Investment Strategy
4. Discuss how moving to the separate LLC impacts your analysis above.