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considerations, and respondent’s expert’s own stated preference
for the discounted cash-flow analysis, we accord considerably
more weight to its results, than to the results indicated by the
market comparable approach.
On the basis of the foregoing, we conclude that respondent’s
expert’s discounted cash-flow analysis, as adjusted to reflect
more closely IHC’s actual experience, provides the most reliable
indication of value; namely $3.8 million. This figure is
sufficiently close to the adjusted book value of IHC’s assets
(i.e., $4 million plus) that the two indications of value are
reconcilable. Conversely, we think the $2.0 to $2.6 million
value indicated by petitioner’s expert’s capitalization of
earnings method is so divergent from the asset-based value that
the former should be disregarded. We accordingly find that the
value of IHC as a whole was $3.8 million on the valuation date.
We now consider the appropriate minority discount to apply
in determining the value of petitioner’s shares of IHC stock.
The parties agree that the minority discount is the inverse of
the control premium.
Respondent’s expert reviewed 1991 control premium figures
for the overall market (35 percent), general contractors (28
percent), and construction companies (45 percent), selected 30
percent as the appropriate control premium for IHC, and converted
this to a minority discount of 23 percent. Petitioner’s expert
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