Estate of Marcia P. Hoffman, deceased, Elisabeth Hoffman, Personal Representative - Page 24




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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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