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net income of $877,770 in 1992. Although Sterling's 1992 income
statement did not report this income until after the applicable
valuation date, it is reasonable to conclude under the facts
herein that Sterling had (or could have obtained) enough
information on September 18, 1992, to ascertain that it would
report a significant amount of net income for that year.
The fact that Sterling had not effectuated partial
redemptions in 1991 or 1992 is also not controlling. Redemptions
during those periods were based on a "best efforts" standard, and
Sterling's failure to redeem the Sterling preferred stock during
those years under the circumstances herein does not support a
finding that Sterling would have breached its obligation to
effectuate the mandatory redemptions which were scheduled for
each December 31, 1993 through 1995. Indeed, Sterling met its
obligation to redeem the decedent's Sterling preferred stock when
it redeemed all Sterling preferred stock on January 17, 1994. We
will overrule the estate's relevancy objection to the
admissibility of facts concerning the redemption.
Turning to the valuation issue, special rules govern the
valuation of corporate stock. When stock is listed on an
established securities market, the stock's value usually equals
its listed market price. When stock is not listed on such a
market, the stock's value may be based on arm's-length sales (if
any) that have occurred within a reasonable time of the valuation
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