- 56 -
mean and median of the guideline companies; both the price-to-
earnings multiple (used but ultimately ruled out) and the price-
to-book equity ratio are near the highest values in the guideline
company data. In contrast, the price-to-earnings multiple and
price-to-book ratios selected by Mr. Magee are comparable to the
mean values from the minority group data.
While there is little difference in Mr. Fuller's guideline
company data, and Mr. Magee's control group data, we think that
Mr. Magee's criteria for the selection of comparable companies
produced a group of companies that more closely resembled the
size and operating characteristics of Peoples than Mr. Fuller's
guideline companies. Accordingly, in determining the value of
the estate shares under the guideline method, we rely on the data
supplied by Mr. Magee.
Mr. Magee did not, however, address Peoples'
overcapitalization and, unlike Mr. Fuller, did not make any
normalizing adjustments. In contrast, as discussed supra, Mr.
Fuller removed excess equity, valued equity from operations, and
then added back the excess equity. Adjustments to equity were
necessary to value Peoples properly, and we think Mr. Fuller used
a sensible approach in so doing. Accordingly, in valuing the
estate shares, we use adjusted equity and assets of $6,999,000
and $77,770,000, respectively, for purposes of the guideline
method, and $12,919,000 in excess equity before discounts.
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