- 58 -
was on the valuation date; we therefore think it appropriate to
value Peoples as an enterprise at the low end of the control
group. Accordingly, for purposes of valuing the estate shares,
we use a price-to-book ratio of 77 percent and price-to-assets
ratio of 5.5 percent. Based on adjusted shareholder equity of
$6,999,000 ($2,333 per share) and adjusted assets of $77,770,000
($25,923 per share), we find a value of equity used in operations
of $5,389,230 ($1,796.41 per share) using the price-to-book
ratio, and $4,277,350 ($1,425.78 per share) using the price-to-
assets ratio. Averaging the two ratios, we find a value of
equity from operations of $4,833,290 ($1,611.10 per share). We
agree with Mr. Fuller's application of a 10-percent minority
discount to the excess equity, and, accordingly, add $11,627,100
($3,875.70 per share) of excess equity from nonoperating assets
to the value of equity from operations, producing a fair market
value of total equity of $16,460,390 ($5,486.80 per share).
Accordingly, we hold that the fair market value of 1,499 shares
of Peoples stock, before consideration of marketability concerns,
is $8,224,713.25
Mr. Magee distinguished the estate shares from the shares of
publicly traded companies due to their lack of marketability in
support of his application of a 30-percent marketability
discount. Mr. Magee cited several empirical studies that, on
25 $5,486.80 x 1,499 = $8,224,713
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