1. Bill Butler established an irrevocable trust and transferred his ski house to the trust. The ski house was located in Maine and Bill lived in Rhode Island. The terms of the trust provided that Bill’s wife Lori had the right to use the home during her lifetime, or to rent the home out. Following Lori’s death, the house would pass outright to his children if they survived Lori. Bill filed a gift tax return reporting the transfer of the house to the trust.

Which of the following best describe Bill’s children’s interest in the property?

A. Bill’s children have a vested remainder interest in the home.

B. Bill’s children have a contingent remainder interest in the home.

C. Bill’s children are current income beneficiaries of the home.

D. Bill’s children have no interest in the home.

2. The Tire Treader needs to raise $25 million to build a new manufacturing facility. The estimated direct costs of floating an equity issue to fund this project are $615,000 and the underwriting spread is 8.6 percent. What is the minimum number of shares of stock the firm must sell to reach its financing goal if the offer price is set at $28.50 a share?

983,339.00 shares

919,430.00 shares

937,816.00 shares

955,179.00 shares