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In the instant case, both parties’ experts determined the
overall value of JM and Speciality using a combination of a
market comparable analysis and a discounted future cash-flow
(DCF) analysis.12
1. Respondent’s Expert
Respondent relied on the report and testimony of an expert
appraiser, Mr. Stewart. The parties agree that Mr. Stewart
qualifies as an expert for purposes of this case.
Mr. Stewart determined the value of the property interests
in issue in the following manner. He determined the values of
the preferred stocks of JM and Specialty by comparing them to
five companies which he felt had similar characteristics. Mr.
Stewart then valued JM and Specialty using a market approach. To
determine the overall values of the common stocks under his
market approach, Mr. Stewart subtracted the value he assigned to
the preferred stocks from the values he assigned to JM and
Specialty and then applied a marketability discount.13 Mr.
11(...continued)
standard.
12Throughout their reports, Mr. Stewart and Mr. Browning
chose to round off certain numbers while being specific as to
other numbers. As a result, our analysis of their reports and
the figures we use are generally rounded off with specific
numbers used in certain instances.
13Mr. Stewart did not apply a minority discount because, in
his opinion, the market approach already produces a per-share
value for a minority interest.
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