Norwest Corporation and Subsidiaries - Page 84

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         generally exceeded (both before and after its acquisition by                 
         Federal) and the 15-percent rate of return on equity that                    
         petitioner projected its proposed acquisition of FIA would produce.          
              In sum, Mr. Fuller testified that Mr. Huck overvalued FIA's             
         lease portfolio by approximately $4 to $5 million, which results in          
         approximately $1.2 to $2.2 million in intangible assets.                     
                   3. Critique of Experts                                             
              Not unexpectedly, each expert criticized his colleague's                
         analysis. The following points highlight these disparate                     
         perspectives.                                                                
              Mr. Fuller opined that Mr. Huck simply used the portfolio's             
         expected yield (the rate at which petitioner expected the portfolio          
         to earn income) as the appropriate discount rate. Use of the                 
         portfolio's expected yield, he insisted, assumes that no other               
         assets are necessary to realize that yield and treats the portfolio          
         as the equivalent of a fixed-income instrument.  According to Mr.            
         Fuller, Mr. Huck ignored the fact that petitioner purchased a going          
         concern; the purchase included the FIA portfolio in addition to              
         other FIA assets, and the right to hire FIA's expert personnel (who          
         originated the equipment leases and turned the residual value into           
         profits). The presence of these other business assets, in Mr.                
         Fuller's opinion, was necessary to produce income at the yield               
         rate.  Mr. Fuller contended that the 11.49-percent yield required            








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