May T. Rakow - Page 8




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          Standard & Poor’s Stock Reports.  Ignoring those P/E ratios over            
          25 and those not calculable due to losses or zero profits (which            
          eliminated eight companies and truncated the range for one),                
          petitioner’s expert determined that the median of the midpoints             
          of the companies’ 1992 ranges of P/E ratios was a P/E ratio of              
          14.25.  Petitioner’s expert then considered the following factors           
          and made adjustments of unspecified quantities in the directions            
          indicated below for an end result of a pretax P/E ratio in the              
          range of 3 to 5:                                                            
                         Factor                        Adjustment                     
                    Market diversification             Down                           
                    Product diversification            None                           
                    Management depth                   Down                           
                    Future earnings prospect           None                           
                    Financial strength                 None                           
                    Access to capital markets          Down                           
                    Marketability                      Down                           
                    Control                             Up                            
                    Net effect                         Down                           
               Petitioner’s expert also calculated a capitalization rate              
          using the buildup approach as follows:                                      
















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Last modified: May 25, 2011