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B nonvoting stock. In addressing the economic theory underlying
voting rights valuation, Dr. Spiro opined that because decedent's
class A voting stock constitutes only a 23.55-percent voting
interest in J.R. Simplot Co., it does not enable the hypothetical
buyer to exercise all the prerogatives of control. However,
relying on empirical evidence, Dr. Spiro noted that nonmajority
voting blocks of sufficient size are valued at a premium in the
marketplace in excess of the pro rata equity value represented by
those blocks. Moreover, analyzing the available studies, Dr. Spiro
suggested that voting premiums, if measured on a per-share basis
against nonvoting or low-voting shares (a "simple voting premium"),
are affected by the scale factor--generally, a small proportion of
voting stock in a capital structure tends to produce a high per-
share voting premium, pointing to the utility of calculating the
value of the aggregate voting stock as a percentage of total equity
capitalization (the "aggregate voting rights percentage").
Dr. Spiro also analyzed U.S. public markets, noting their
limitations and impediments to the trading of nonvoting stock. In
his view, it is unlikely that a company with a similar capital
structure to J.R. Simplot Co.'s would list its securities on the
U.S. exchanges. Moreover, he believed that a simple voting stock
price premium24 is irrelevant to the valuation of the class A voting
shares because the U.S. dual-capitalization stock price data for
24 Dr. Spiro defines a simple voting stock price premium
as the percentage difference between voting share prices and
nonvoting or inferior-voting share prices.
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