Estate of Cyril I. Magnin, Deceased, Donald Isaac Magnin, Executor - Page 28




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          assigned to Specialty, $300,000, and subtracted the value he                
          assigned to the Specialty preferred stock, $62,500.  Mr. Stewart            
          then applied a 35-percent lack of marketability discount to this            
          figure and determined a value of $155,000 for the total common              
          stock of Specialty.20  Mr. Stewart applied the number of                    
          outstanding shares, 1,000, and determined a value of $155 per               
          share for Specialty common stock.                                           
               Mr. Stewart determined that the value of Specialty common              
          stock under the DCF method, before marketability and minority               
          discounts, was $295,000.  This determination was made by taking             
          the value he assigned to Specialty under the income approach,               
          $358,000, and subtracting the value he assigned to the Specialty            
          preferred stock, $63,000.21  Mr. Stewart applied a 20-percent               
          minority discount and a 35-percent lack of marketability                    
          discount, yielding an aggregate Specialty common stock value of             
          $150,000, or $150 per share.22                                              
               Mr. Stewart gave approximately equal weight to the market              
          approach and the income approach, thereby determining the                   


               20Mr. Stewart did not apply a minority discount because, in            
          his opinion, the market approach already produces a per-share               
          value for a minority interest.                                              
               21In his valuation of Specialty common stock, Mr. Stewart              
          rounded the value he assigned to Specialty preferred stock,                 
          $62,500, up to $63,000.                                                     
               22Mr. Stewart rounded this number down from the $153,000               
          figure that application of the discounts yields.                            





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