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To narrow the range of the discount, Gasiorowski considered
Savings' 1991 revenues, positive earnings history, positive
dividend growth history, payout ratio, and the expected long-term
growth rates of its earnings and dividends. Gasiorowski
concluded that these factors indicated that a discount at the
lower end of the range would be appropriate, before considering
the size of the block held by petitioner.
In considering the appropriate discount for the size of the
block, Gasiorowski estimated that, based on the average number of
shares traded in the 4 prior years, it would take petitioner more
than 8 years to dispose of all its shares unless it was willing
to sell them at a significant discount.10 Accordingly,
Gasiorowski tentatively concluded that a discount of 40 to 45
percent should be applied to the $310 indicated value, which
resulted in a value of $170 to $186 per share.
9(...continued)
the eighth in the series.
10At trial, Gasiorowski denied using the term "blockage" in
his report. However, we note that in his written report,
Gasiorowski opined that "it would be difficult to sell the 12,889
shares held by the Estate without incurring a significant
discount for the sale of the entire block." Furthermore,
Gasiorowski testified that "after considering the size of the
block, we thought the discount for lack of marketability would be
in the 40 to 45 percent range." Thus, it is evident that when
Gasiorowski considered the marketability of the Savings shares,
he considered the effect of blockage, and that his estimate of
the discount for lack of marketability includes a component for
blockage.
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