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corresponding asset category of the partnership. At trial, he
testified that medians “in my opinion are often more relevant
[than means] because it takes outliers out of the equation”.
However, Mr. Dankoff’s written report suggests that he may have
accounted for outliers (by excluding them from his samples) prior
to determining sample medians: “After adjusting for outliers and
asset homogeneity with the subject assets, we then calculated a
weighted average median discount”. In any event, Mr. Dankoff
eventually conceded at trial that “I don’t think I have a good
reason as to why one was better than the other, and I think
either one [median or mean] could have been used.” Because it
seems more straightforward to us to account for obvious outliers
by excluding them from the samples in question, we utilize the
mean discount from each of our samples as the minority interest
discount factor for each corresponding asset category of the
partnership.
g. Minority Interest Discount Factor for Each Asset
Category
Based on the methodology described above, we conclude that
the appropriate minority interest discount factors for the
partnership asset categories are as follows:
Asset Type Discount Factor
Cash & money market funds 2.0%
U.S. Government bond funds 6.9%
State & local bonds (MI) 3.5%
Natl. Muni bond funds 3.4%
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