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expert concluded that the value of Kosman, Inc.'s Scottsbluff
National Corp. stock was as follows:
Date Total Value Value Per Share
9/30/86 $2,810,133 $218.96
3/31/87 2,991,447 233.09
b. Respondent's Experts’ Estimate of the Value of Kosman,
Inc.'s Scottsbluff National Corp. Stock
Respondent relied on expert reports coauthored by three
experts. They used: (1) An income method, based on Scottsbluff
National Corp.'s projected after tax earnings over a 5-year
period; and (2) a market method, based on the price of stock in
comparable banks. To apply the income method, respondent's
experts estimated the present value of Scottsbluff National
Bank's projected after-tax earnings for 5 years. They used a
14-percent discount rate on the assumption that an investment
in Scottsbluff National Bank was comparable to one in "Standard &
Poor’s 500 small capitalized companies". Respondent's experts
concluded that a 100-percent stock interest in Scottsbluff
National Corp. was worth $19.2 million on September 30, 1986, and
March 31, 1987.
To apply the market method, respondent's experts used as
comparables First Commerce and First National Bank of Nebraska.
They estimated that First Commerce stock traded at 54 percent of
its book value per share on December 31, 1986. They noted that
Scottsbluff National Corp. was more profitable and paid higher
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