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price. Mr. Spiro used the 11, 10.9, and 12.5 percentages from
these comparable issues to derive a multiple to apply to the
redemption price of Sterling's preferred stock to arrive at its
freely traded value. He settled on a 15-percent multiple for the
Sterling preferred stock, concluding that an upward adjustment to
the percentages derived from the comparable issues was necessary
because Sterling had a positive cash-flow and was timely paying
interest and principal on its senior debt. He calculated that
the freely traded value of each subject share was $150 (i.e.,
15 percent of the $1,000 redemption price, exclusive of accrued
dividends), and that the freely traded value of all of the
decedent's Sterling preferred stock totaled $230,022. Mr. Spiro
reduced this freely traded value by 20 percent to reflect the
stock's alleged lack of marketability, and opined that the fair
market value of the decedent's Sterling preferred stock on the
applicable valuation date was $184,018.
We are unpersuaded by Mr. Spiro's analysis and opinion. The
Sterling preferred stock was a better grade than a "C" or "D"
rated security. In addition to the fact that Sterling was paying
its monthly operating expenses, Sterling was servicing its senior
debt. The fact that Sterling may have postponed paying interest
and/or principal on some of its liabilities is not entitled to
much weight, because any postponed payment was done with the
consent of the relevant creditor. Mr. Spiro also relied
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