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erroneous assumptions (i.e., the Applied Power stock would not be
absorbed by the market at a volume greater than twice the stock's
average daily trading volume for the months of November and
December 1993, and the price trend for the Applied Power stock for
the 40 trading days preceding the valuation date should be
projected forward to the 40 trading days following the valuation
date).
Respondent complains that to a large extent, Mr. Kleeman's
calculation of a 22.5-percent blockage discount was determined by
using 18 selected blockage discount tax cases. We also find fault
with this approach. Each case is different, and the determination
of a blockage discount, if any, depends upon the particular facts
and circumstances involved. In obtaining the average discount from
these cases, Mr. Kleeman weighted the discount allowed in each
equally; and in obtaining the median discount for the stock of
Applied Power, he selected a value such that half the discounts in
his selected cases fell above that value and half below.
Responding to Mr. Kleeman's criticism of his report, Mr. Davis
maintained that he (Mr. Davis) arrived at a 3.3-percent blockage
discount primarily by considering events occurring before the date
of death. Moreover, Mr. Davis maintained that he did not arrive at
his blockage discount conclusion by considering post-valuation date
sales, but rather used those sales to substantiate his conclusion.
Court's Analysis and Conclusion
Giving due consideration to the totality of the evidence
before us, we find Mr. Davis' report to be more reliable than that
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