May T. Rakow - Page 23




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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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