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Stewart also used an income approach to value JM and Specialty.
After determining the values of JM and Specialty, he subtracted
the value of the preferred stocks and applied discounts for lack
of marketability and for minority interest. Mr. Stewart gave
equal weight to each valuation in reaching his final valuation
determination. Mr. Stewart then applied his valuation
determinations of JM and Specialty stocks to the property
interests transferred and received by Cyril to arrive at his
valuation of the interests at issue.
i. Valuation of JM and Specialty
In applying the market comparable method to value JM, Mr.
Stewart compared JM’s financial performance and position with
five publicly traded companies listed on the New York Stock
Exchange (NYSE). The companies used were: (1) Allied Stores
Corp.; (2) Marshall Field & Co.; (3) May Department Stores; (4)
Federated Department Stores; and (5) R.H. Macy & Co. Mr. Stewart
chose these five companies based on such factors as line of
business, geographic location, sales, total assets, market
capitalization, and number of outstanding shares. All five
companies were department stores which were substantially larger
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