Jane O. Kosman - Page 35

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            5.  Discounts for Stock of Kosman, Inc.                                                       
                  The experts applied the following discounts:                                            
            Petitioner's                                            Respondent's                          
              Discount            Expert         Experts                                                  
            Voting &                                                                                      
                        nonvoting stock                                                                   
            Minority interest   10 percent     10 percent                                                 
                        lack of market-     25 percent     10 percent                                     
            ability                                                                                       
            Nonvoting stock                                                                               
            Lack of voting      10 percent      4 percent                                                 
            power                                                                                         
                  a.  Minority Interest Discount                                                          
                  Both parties' experts applied a 10-percent minority interest                            
            discount to value the voting and nonvoting Kosman, Inc., stock                                
            that petitioner gave to her children.  We apply a 10-percent                                  
            minority discount.                                                                            
                  b.    Lack of Marketability Discount                                                    
                  Petitioner's expert applied a 25-percent marketability                                  
            discount to the stock of Kosman, Inc.  He cited a 1971 Securities                             
            and Exchange Commission (SEC) study of sales of restricted stock                              
            by over-the-counter publicly owned companies in which the stock                               
            was discounted for lack of marketability by 30 to 40 percent.  He                             
            said that the SEC study suggested use of a significant discount                               
            here.                                                                                         








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