- 21 -
it is methodologically appropriate to use the
comprehensive sample I collected to estimate
marketability discounts even though approximately half
the sample consists of post-valuation date
announcements because there is no reason to believe
that the underlying economics of private placement
would have changed after the valuation date.
We agree. Further, petitioners have not alleged that the
observed lack of marketability discounts in similar private
placement transactions would have changed after the valuation
date.
Additionally, after performing an identical statistical
analysis on only the prevaluation portion of his data sample,
Dr. Bajaj reported a predicted discount similar to the discount
he predicted using his complete data.10 For the foregoing
reasons, petitioners' motion will be denied, and an appropriate
order will be issued.
IV. Valuation of the Gift
1. Tax Affecting G&J's Earnings
A. Introduction
The decision whether to tax affect G&J’s projected earnings
under the discounted cash-flow approach accounts for the most
significant differences between the parties' expert witnesses.
In fact, Dr. Bajaj repeated his analysis, substituting a
10 In fact, the predicted discount associated with the
prevaluation data was slightly lower than with the full sample.
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