Estate of Cyril I. Magnin, Deceased, Donald Isaac Magnin, Executor - Page 26




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          dividend rate, had not paid dividends yet, did not have access to           
          a liquid market, and that the corporation had rights concerning             
          redemption and first refusal.  Mr. Stewart divided the 5-percent            
          rate by 8 percent, the yield he believed an investor would                  
          require, and arrived at a value of 62.5 percent of par value.               
          Specialty preferred stock had a par value of $1 per share; thus,            
          Mr. Stewart concluded that the value of Specialty preferred stock           
          was $0.625 per share.  On the basis of the total number of                  
          preferred shares, 100,000, Mr. Stewart determined that the                  
          aggregate preferred stock value of Specialty was $62,500.                   
                         iii. Valuation of JM and Specialty Common Stock              
               To determine the value of JM common stock under the market             
          approach, Mr. Stewart took the value he assigned to JM, $1                  
          million, and subtracted the value he assigned to the JM preferred           
          stock, $97,000.  This resulted in an aggregate common stock value           
          of $903,000, before any discounts.  Mr. Stewart then applied a              
          35-percent lack of marketability discount to this figure and                
          determined a value of $585,000 for the total common stock value             
          of JM.18  Mr. Stewart divided the total common stock value of               
          $585,000 by the number of outstanding common shares, 182,457, and           
          determined a value of $3.21 per share for JM common stock.                  
               Mr. Stewart determined the value of JM common stock under              

               18Mr. 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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