Pabst Brewing Company - Page 29

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          entity (New Pabst) of which Heileman was not a shareholder).                
          He ascertained the fair market values of petitioner, Olympia, and           
          New Pabst by reference to objective market price data, including            
          the competitive bids for the stock of Olympia and petitioner.               
          He did not ascertain a specific value for each of the breweries             
          and brands of beer.  Rather, he ascertained an aggregate value              
          for all of the Transferred Assets.                                          
               In general, Weinberg valued the breweries and some of the              
          brands of beer by way of a five-step discounted cash-flow model             
          that he designed.  First, he estimated the size of the total                
          market in total barrels and the expected share of the market that           
          a company or product could capture.  Second, he used these                  
          estimates to project future sales.  Third, he modeled the cost              
          structure to measure the profits (or contribution to cash flow)             
          associated with a given level of sales.  Fourth, he projected               
          future profit from the projection of sales and the model of cost            
          structure.  Fifth, he discounted the future stream of profit to             
          arrive at its present value in 1983.  Weinberg did not reference            
          comparable sales because, he stated, he does not find them                  
          meaningful in the beer industry and he could not find any.                  

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Last modified: May 25, 2011