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only the national economy, but also the specific economies of the
geographic region in which Brookshire operated its stores.
In selecting earnings multiples, petitioner's first expert
properly considered the increased competition from Wal-Mart and
the decrease in Brookshire’s net income for Brookshire’s fiscal
year ending September 28, 1993.
For the reasons stated, we agree with petitioner's first
expert witness that, before applying any discount, the date-of-
death value of decedent's 106,826 shares of Brookshire stock
equals $11,493,409 or $107.59 per share.
With regard to the discount for lack of marketability, the
parties' three expert witnesses rely on various market studies
which indicate that discounts for lack of marketability often
fall in a range of 23 to 45 percent with an average of
approximately 35 percent for the restricted stock of a publicly
traded company.
It is clear that decedent's block of 106,826 shares was not
readily marketable and that any hypothetical purchaser would
demand a significant discount to account for that fact.
Certainly, the consistent history of Brookshire's strong
current financial position and liquidity as well as the quality
management would make Brookshire an attractive investment. There
still existed, however, no public market in which to sell the
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