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public market. He then applied a 35-percent discount for lack-
of-marketability. After applying those discounts, Mr. Stryker
determined under the cost approach that the fair market value on
the valuation date of the common stock of Marrero Land on a
minority, noncontrolling basis was $33,406 per share.
Under the market approach, Mr. Stryker first determined the
value of the stock of Marrero Land as if it were freely traded.
He computed that value by analyzing and comparing the operating
performances and financial conditions of selected comparable
publicly traded real estate companies and of Marrero Land. In
comparing Marrero Land and the comparable companies, Mr. Stryker
examined size, profit margins, earning power (i.e., turnover
ratios and rates of return), long-term return (i.e., annual
growth rates), and financial risk (i.e., capital structure and
fixed-charges coverage). Mr. Stryker indicated that investors in
freely traded common stocks of public companies generally eval-
uate those stocks with investor appraisal ratios, such as price-
to-earnings ratios, price-to-cash flow ratios, and price-to-
tangible book value ratios, and dividend yields. Because Marrero
Land was an S corporation as of the valuation date and its 1987
and expected future distributions were not comparable to div-
idends paid by public companies, Mr. Stryker did not consider
dividend yields in his market approach to value.
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