Estate of Helen J. Smith, Deceased, Frederic L. Foill II and Cassandra F. Vallery, Co-Executors - Page 19




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                    Minority Interest Discount                                        
               To determine an appropriate minority interest discount to              
          apply to his asset-based value, Mr. Keath used a list of 13                 
          publicly traded real estate investment trusts (REIT’s) culled               
          from Realty Stock Review.  As with Mr. Egan’s approach, the                 
          underlying premise for using publicly traded companies was that             
          each trade of shares of stock involved a minority interest, and             
          therefore the prices at which the shares were traded reflected              
          any inherent minority interest discount.  He computed the average           
          by which market value of equity plus debt (which he termed total            
          capital) exceeded net asset value plus debt.  By Mr. Keath’s                
          computation, the average REIT reflected a premium for a minority            
          interest rather than a discount:  On average, the market value of           
          total capital exceeded net asset value plus debt by 1.5 percent.            
               The next step in Mr. Keath’s analysis was to make                      
          adjustments to this figure of 1.5 percent to account for the                
          differences between JFI and the average REIT.  His method was to            
          compile a list of 12 characteristics of REIT’s, and then to                 
          assess  whether JFI was higher or lower than the average with               
          respect to each characteristic.  The premise underlying Mr.                 
          Keath’s method was that 95 percent of all REIT’s would fall                 
          within two standard deviations of the average REIT, and therefore           
          that there was a 95-percent chance that each of the 12                      








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