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growth since inception of both the corporation’s earnings and
revenues, and although an income statement for the first 6 months
of 1990 was reasonably available to him, which showed continued
growth in both earnings and revenues, Klemm does not specifically
acknowledge such growth (or any future growth) in any of the
approaches that he adopted. He seems to contradict his own
statement, in introducing his valuation approaches, that “Value
measures generally take into account the trends in growth,
performance, and stability of * * * [earnings, revenue, and book
value].” We are unpersuaded that his static view of the
corporation’s future was either necessary or correct.
We are unconvinced that, either individually, or in
conjunction, Klemm’s approaches to valuation of the shares
produce a reliable result.
B. Public Offering
The corporation had an initial public offering of stock in
June 1990, at a price of $10 per share. The possibility of an
initial public offering was discussed at a meeting of the board
of directors of the corporation on August 24, 1989. In his
report, Klemm states specifically that (1) during his interview
with Bernard V. Vonderschmitt, president of the corporation, he
did not inquire as to whether, on October 22, 1989, the
corporation had any plans for a public offering of stock, and
(2) he did not consider the potential for a public offering in
carrying out his valuation assignment.
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