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discount of 45 percent to reflect the lack of marketability of
the stock.
Petitioner's second expert values the 106,826 shares of
Brookshire common stock subject to the stock-purchase agreement
at $5,237,679 or $49.03 per share. Petitioner's second expert
utilized: (1) The guideline company method, comparing
Brookshire's net income, earnings, and cash-flow with those of
similarly sized, publicly traded corporations operating grocery
stores; (2) the discounted cash-flow method, calculating the net
present value and future earnings of Brookshire and the return on
investment using an 11-percent rate of return; and (3) the
transaction method, comparing actual sales of stock within a
reasonable time before or after the valuation date and applying a
20-percent blockage discount because there were no other blocks
of stock similar in size to decedent's block of stock sold within
several years of the valuation date. Petitioner’s second expert
also applied a discount of 40 percent to reflect the lack of
marketability of the stock.
Respondent's expert values the 106,826 shares of Brookshire
common stock subject to the stock-purchase agreement at
$9,522,470 or $89.14 per share. Respondent's expert utilized:
(1) The guideline company method, comparing Brookshire's revenue,
earnings, cash-flow, and book value with those of similarly
sized, publicly traded corporations operating grocery stores; (2)
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