-68-
value than an identical amount of cruzados obtained on the
parallel market for fewer U.S. dollars.
Finally, we agree with Dr. Cline that no discount should be
applied for the possible elimination of the official rate premium
at the end of the 12-year waiting period. Foreign investors, such
as petitioner, who received dividends from their registered
investments would continue to receive the benefits of a favorable
cruzado-to-dollar exchange rate during the years that the official
rate premium was shrinking. Dr. Cline believed that a narrowing
of the spread between the official and parallel market rates would
likely be accompanied by an overall improvement in economic
conditions, which would have a positive impact on the value of
equity investments. In this regard, Dr. Cline testified that he
would forgo a 25-percent exchange rate premium for a 100-percent
increase in the value of his investment.
Determining an appropriate discount rate with mathematical
precision is impossible. "Valuation is * * * necessarily an
approximation * * *. It is not necessary that the value arrived
at * * * be a figure as to which there is specific testimony, if
it is within the range of figures that may properly be deduced
from the evidence." Anderson v. Commissioner, 250 F.2d 242, 249
(5th Cir. 1957), affg. in part and remanding in part T.C. Memo.
1956-178; see also Estate of Barudin v. Commissioner, T.C. Memo.
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