With Respect to a Stock Interest in a Closely Held

question 126

Multiple Choice

With respect to a stock interest in a closely held corporation, which, if any, of the following factors work to increase the gross estate value of the interest?

• A)The stock is not marketable.
• B)A majority interest is involved.
• C)The profits of the business are less than the industry average.
• D)The blockage rule applies.
• E)None of the above.

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Definitions:

External Financing

Funds that a business raises from outside sources to finance its operations or growth, such as loans or equity investments.

Dividend Payout

The part of a business's profits distributed to its shareholders as dividends.

Operating Capacity

The maximum output that a company can achieve using its production equipment under normal working conditions.

Dividend Payout Ratio

A financial metric that measures the percentage of a company's net income that is paid out to shareholders in the form of dividends.