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valuation date of the stock interest in question.
In applying the transaction method, Mr. Bernstein examined
the precedent transactions that occurred in 1987, 1989, and 1991,
respectively. He concluded that under that method the value of
decedent's 50-percent stock interest in B&W Longview should be
derived by (1) adding to the book value of B&W Longview on the
valuation date a premium equal to 23 percent of the gross amount
of the trade notes receivable held by that corporation on that
date and (2) multiplying the resulting sum by 50 percent to
reflect the fact that decedent owned only a 50-percent stock
interest in B&W Longview. Mr. Bernstein determined that, under
the transaction method and before considering any discounts that
he believed are warranted because of the lack of control and the
lack of marketability inherent in that stock interest on the
valuation date, its value was $1,200,801.
In applying his modified market multiple method, Mr.
Bernstein selected three publicly traded companies (guideline
companies) engaged to varying degrees in consumer lending that he
determined were comparable or similar to B&W Longview. Mr.
Bernstein did not explain in his report or adequately explain at
trial why the three guideline companies that he chose were
comparable to B&W Longview on the valuation date and why he
selected only three publicly traded companies as guideline
companies. For these reasons, we are not persuaded that the
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