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Spiro next considered the particular facts and circumstances of
the Savings stock, including the existing market for the stock,
the rising price trend of the traded shares, Savings' history of
paying increasing dividends, and the lack of restrictions on
trading the shares. Spiro concluded that a liquidity discount of
20 percent was appropriate and that under the market method the
fair market value of the stock was $295.27 per share.
To incorporate the actual sales value into his analysis, and
to reflect the amount of time it would take to sell a block of
shares the size of petitioner's, Spiro assumed that the
shareholder could go to a lender and hypothecate the block for a
loan. To repay the loan, the shareholder would sell the shares
over the next 8 years and 3 months at a rate equal to the number
of shares that were sold on average per month during the first 10
months of 1991. Spiro estimated the prices for which the shares
would sell in future years by increasing the actual price at
which decedent sold 1,111 shares in 1991 by a factor that was a
conservative reflection of the historic growth rate of the
stock's book value. In this calculation, Spiro included his
estimation of the cash-flow from future dividends paid. Finally,
Spiro assumed that the shareholder would pay 2 percentage points
above the prime rate, which was 7.5 percent at the date of
valuation, for the loan. Therefore, he calculated the present
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