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decedent shortly before the valuation date. He stated that at no
time was he under compulsion to buy or sell the shares of stock.
The value, however, of decedent's large, minority block of
366,385 shares of stock in Hastings is not controlled by the
value of 2,000 shares nor by the other 1993 transactions
involving small blocks of Hastings stock. Respondent's expert
relies heavily on transactions cumulatively representing less
than 1 percent of Hastings common stock. Decedent's stock, on
the other hand, represents some 14 times the total number of
shares of stock exchanged during 1993.
We note that the A.G. Edwards' report reduced the 40-percent
discount for lack of marketability that it would use for Hastings
stock in general to a 20-percent discount only because of the
liquidity available to the Hastings stock held by the ESOP.
We regard a 15- or 20-percent lack-of-marketability discount
as inadequate in valuing decedent's shares. It is clear that
decedent's large, minority block of Hastings stock was not
readily marketable and that a significant lack-of-marketability
discount is appropriate. Several studies in evidence confirm
that discounts for lack of marketability of stock in closely held
corporations often exceed 30 percent.
In reaching our conclusion as to the appropriate lack-of-
marketability discount to apply to decedent's stock in Hastings,
we regard the following factors as supporting a significant
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