How crowdfunding works
Investment Scenario
This is an investment opportunity to purchase partial ownership in a super market. The value of the whole store is $1,200,000. Currently, the store brings in $438,148 of net profit per year. We are looking for a group of investors to purchase the store and own their own separate shares of it. Each investor will earn a profit in the form of a dividend payable each quarter of the year. The dividend payments will continue throughout the life time of the store. Below is a list of hypothetical investors who own shares in the grocery store,
*Ownership and dividends based on the scenario described above.
What are Shares
A share of a company represents partial ownership of that particular company. For example, from our investment situation, we have a company that is worth $1,200,000. We can split this company into 100 shares worth $12,000 per share. This would equal the total value of the grocery store at $1,200,000 but 120 different investors can own their own piece of it. Additionally, investors can choose both the size and quantity of the shares they want to purchase.
What are Dividends
Simply put, dividends are the payout investors receive for owning a share of a company. In the current investment situation, the company earns $438,148 in net profit per year. If we split up the company into 100 shares worth $12,000 each investor would earn $4381.48 annually in dividend payments. This is because each investor owns 1% of the company, therefore, they will earn 1% of the net profit.
Tax Information
Dividends are taxed by the federal and state government in the form of income taxes. The tax rate changes based off of income and ranges from 10%- 37%. These taxes are paid during the regular tax season when you annually file your income.
