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In their respective original reports (expert reports), both
experts relied on the market approach in determining the fair
market value on the valuation date of decedent's 50-percent stock
interest in B&W Longview. In applying that approach, each of
those experts used a combination of the transaction method and
the market multiple or guideline company method (market multiple
method) in order to arrive at his opinion of that value. At
trial, Mr. Bernstein and Mr. Harrell modified and/or abandoned
portions of their respective expert reports, as follows: In
applying the market approach to valuing the stock interest in
question, petitioner's expert modified his application of the
market multiple method (modified market multiple method), and
respondent's expert modified his application of the transaction
method (modified transaction method) and abandoned his determina-
tion of value under the market multiple method. Consequently,
both experts modified their respective opinions of the fair
market value on the valuation date of decedent's 50-percent stock
interest in B&W Longview. We have problems with the opinions of
both experts.
Mr. Bernstein relied on the market approach and applied an
equally weighted combination of the transaction method and his
modified market multiple method under that approach because he
did not believe that either method alone produced what he consid-
ered to be an accurate estimate of the fair market value on the
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Last modified: May 25, 2011