Question

You start your own company and issue 100% of the 800,000 shares of stock to yourself with a par value of $0.06 per share, and 35 years later you sell your company for $11.45 per share. How much money do you have?

a. $11.45

b. $2,113,487

c. $9,160,000

d. $14,235,982

e. None

If you can get an annual rate of 5% earnings on your investments, and you are the company owner from the question above. How much money will you have to live on each year if you never touch your principal?

a. $516

b. $105,674

c. $458,000

d. $29,694

e. None, because of best alternative to a negotiated agreement

Do you think you will be able to live comfortably with the money from the answer to the question above?

a. I could use some of that now.

b. I think I could manage.

c. No, I will need more than that

d. I plan to marry wealth.

e. All of above.

Answer 1

You start your own company and issue 100% of the 800,000 shares of stock to yourself with a par value of $0.06 per share, and 35 years later you sell your company for $11.45 per share. How much money do you have?

Sale value = 800000 x $ 11.45 = $ 9160000

If you can get an annual rate of 5% earnings on your investments, and you are the company owner from the question above. How much money will you have to live on each year if you never touch your principal?

$ 9160000 x 5% = $ 458000

Do you think you will be able to live comfortably with the money from the answer to the question above?

Subjective answer..will differ person to person

a. I could use some of that now.