Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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?
Step by Step Solution
★★★★★
3.28 Rating (148 Votes )
There are 3 Steps involved in it
Step: 1
Payoff to Edwin the Entrepreneur Edwins firms premoney value was 450000 and Gary invested 125000 so ...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Contemporary Business Mathematics with Canadian Applications
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
11th edition
134141083, 978-0134141084
