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the public market while the Clubside notes lacked a public market
for sale. To account for this lack of marketability, Mr. Bishop
concluded that a knowledgeable investor would require a rate of
return at least 25 percent higher than the 18-percent return
offered by his comparable publicly traded bonds; thus, he
determined that the appropriate rate of return for the Clubside
notes was 22.5 percent. Based on a 22.5-percent rate of return,
Mr. Bishop calculated that the present value of $1 received in 17
years and 4 months; i.e., the length of time between the
valuation date and the date of maturity of the promissory notes,
was $.039. Mr. Bishop applied the present value of $.039 to the
values as of the date of maturity and concluded that the values
of the promissory notes payable to decedent and Hoffman
Associates were $17,022 and $27,358, respectively, as of August
18, 1994.18
We are not persuaded by the analysis and conclusions of Mr.
Bishop. His testimony reflected a lack of knowledge concerning
the comparable companies used, and he failed to properly link
them to Clubside. Mr. Bishop admitted that all the comparables
used were “highly speculative” and that none of the comparables
dealt with real estate. Mr. Bishop testified that he had “no
idea” what the asset-to-liability ratio was for any of the
18Mr. Bishop assigned values to the promissory notes as of
the date of maturity of $436,464 and $701,487, respectively.
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