Hospital Corporation of America and Subsidiaries - Page 60

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          verification.  Mr. Lewis did not independently value the                    
          Securities.  Rather, he essentially expressed his preference for            
          the J.C. Bradford approach over the Goldman Sachs approach in               
          valuing the Securities.  Although Mr. Lewis raised some concerns            
          regarding the Goldman Sachs Valuation, we believe that Mr. Harris           
          successfully countered those concerns.  Consequently, Mr. Lewis's           
          testimony has not persuaded us to disregard the Goldman Sachs               
          valuation in its entirety.                                                  
               The Securities involved in the instant case are                        
          unregistered, newly issued Preferred Stock and Common Stock                 
          Warrants of HealthTrust.  As of September 17, 1987, the valuation           
          date, the Securities were not publicly traded, and, therefore,              
          they had no listed market price.  Cf. Amerada Hess Corp. v.                 
          Commissioner, 517 F.2d at 83 (fair market value of securities               
          traded on a stock exchange generally is the average exchange                
          price quoted on the valuation date).  There were no sales of the            
          Preferred Stock or of the Common Stock Warrants prior to, or                
          within a reasonable time after, the Valuation Date.  Accordingly,           
          actual sales of the Securities cannot be used to determine fair             
          market value.  Cf. Duncan Indus., Inc. v. Commissioner, 73 T.C.             
          266, 276 (1979).  We agree in principle with respondent that                
          under similar circumstances using comparable sales of publicly              
          traded securities generally is preferable to the indirect method            
          employed by Goldman Sachs.  See Estate of Hall v. Commissioner,             
          92 T.C. at 335.  A comparable sales approach, however, is                   




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