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assets ratio, FNBW’s was substantially higher, indicating that
FNBW was financed more through equity than the median. Mr. Egan
summed up by stating: “However profitable the asset base of
* * * [FNBW], the conservative nature of those assets does
penalize the company’s income growth and potential therefor.”
Considering all of the “qualitative” and “quantitative”
factors discussed above, Mr. Egan felt that FNBW was
substantially less valuable than the median comparable company.
To account for these factors, he applied a discount of 30
percent.
Lack of Marketability Discount
To calculate a lack of marketability discount, Mr. Egan used
the same analysis, based on restricted stock sales, that he used
with respect to JFI, and applied the same figure, 35 percent.
To compute the per-share value of FNBW, Mr. Egan began with
his undiscounted value of $16 million, or $160 per share. He
discounted this by 30 percent for general qualitative and
quantitative factors, then discounted the result by 35 percent
for lack of marketability, producing a value of $73 per share.
Court’s Analysis
We find Mr. Egan’s analysis of the undiscounted value of
FNBW, based on the ratios of price to net worth, earnings and
dividends of comparable companies, to be cogent and persuasive.
However, we do not believe that Mr. Egan has made a persuasive
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