At the Time of Rick's Death,he Owned 70% of the Stock

question 39

Multiple Choice

At the time of Rick's death,he owned 70% of the stock in Robin Corporation,a closely held family business.Over the past five years,Robin has averaged annual profits of $400,000 in an industry where the usual rate of return is 9%.If the book value of the corporation's assets is $1,000,000 and goodwill exists,what might be a realistic value of the stock in Rick's gross estate?

• A)$1,785,000.
• B)$2,550,000.
• C)$1,550,000.
• D)$310,000.
• E)None of the above.

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