At the time of Gomez's death, he owned 50% of the stock of Gamma Corporation, a closely held family business.Over the past five years, Gamma has averaged annual profits of $250,000 in an industry where the usual rate of return is 10%.If the book value of Gamma Corporation's assets is $500,000 and goodwill exists, what might be a realistic value for the stock included in Gomez's gross estate?
A) $1,500,000.
B) $1,000,000.
C) $750,000.
D) $200,000.
E) None of the above.
Correct Answer:
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