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IFSE Institute LLQP Exam - Topic 3 Question 33 Discussion

Alana, Meaghan, and Beatrice are equal shareholders of Advanced Tech Inc. They each own 100 shares of the company. Each share is currently worth $5,000. They recently signed a cross-purchase buy-sell agreement that is funded by life insurance. What will happen under this agreement if Alanadies today?
D) Alana's estate would receive a total of $500,000.
A) Meaghan and Beatrice would each still own 100 shares of the company.
B) There would now be 200 outstanding shares of the company.
C) Each share would now be worth $7,500.

IFSE Institute LLQP Exam - Topic 3 Question 33 Discussion

Actual exam question for IFSE Institute's LLQP exam
Question #: 33
Topic #: 3
[All LLQP Questions]

Alana, Meaghan, and Beatrice are equal shareholders of Advanced Tech Inc. They each own 100 shares of the company. Each share is currently worth $5,000. They recently signed a cross-purchase buy-sell agreement that is funded by life insurance. What will happen under this agreement if Alanadies today?

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Suggested Answer: D

by Johanna at Jul 21, 2026, 09:28 AM

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Evan
25 days ago
True, but the buy-sell agreement means Alana's shares go to her estate. D makes sense.
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Demetra
1 month ago
Yeah, but what about A? Meaghan and Beatrice still own their shares.
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Tamekia
1 month ago
I think D is correct. Alana's estate gets $500,000 from the life insurance.
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Doretha
1 month ago
Each share stays at $5,000, no changes there.
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Alesia
2 months ago
200 shares? That doesn't sound right at all.
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Maira
2 months ago
Wait, how does the life insurance work in this case?
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Sonia
2 months ago
I agree, D is definitely the right answer!
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Karima
2 months ago
Alana's estate gets $500,000 from the life insurance.
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Lisha
2 months ago
I think the cross-purchase agreement means Meaghan and Beatrice would buy Alana's shares, but I'm not clear on how that affects the estate payout.
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Craig
2 months ago
I feel like the answer has to do with the total value of the shares, so maybe D is correct since each share is worth $5,000?
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Youlanda
3 months ago
I remember a similar question where the payout went directly to the remaining shareholders, but I can't recall if that applies here.
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Lorean
3 months ago
I think the life insurance would pay out to Alana's estate, but I'm not sure if it's the full value of her shares or just a portion.
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