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b. Petitioners' Expert
Petitioners' expert, Mark L. Mitchell, is a principal in
Business Valuation Services, Inc. He holds a master of business
administration degree in finance and bachelor of science degrees
in mathematical sciences and economics and systems analysis, all
from Southern Methodist University. He is a member of the
Association for Investment Management and Research, a member of
the Dallas Association of Investment Analysts, and a senior
member of the American Society of Appraisers.
Mr. Mitchell utilized a discounted cash-flow model to
determine the value of State Supply assuming the presence of the
noncompete agreements. He concludes that State Supply is worth
$8,516,931. Both parties' experts agree on the value of State
Supply with the covenants in place.4
To value the noncompete agreements, Mr. Mitchell calculated
the value of State Supply without them and subtracted that value
from the previously determined value of State Supply with the
noncompete agreements. In order to calculate the value of State
Supply without the noncompete agreements, Mr. Mitchell made
assumptions concerning the impact that competition from Holliday
and Beaurline would have and the probability of that competition
4 By using the bank's base level of return number of
$850,000 (a number the bank calculated assuming the existence of
the noncompete agreements), respondent's expert has, perhaps
inadvertently, valued State Supply with the noncompete agreements
in place.
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