- 30 -
Respondent determined this amount by first multiplying the stock
interests Joseph held in JM and Specialty by the values per share
that Mr. Stewart determined in his report. The following chart
summarizes these calculations:
Entity No. of Shares Per Share Value Total Value
JM:
Common 32,490 $2.41 $78,301
Preferred 21,464 1.33 28,547
Common option 18,158 1.00 18,158
Specialty:
Common 112.5 152.00 17,100
Preferred 25,000 .625 15,625
Total 157,731
Mr. Stewart then used a factor for calculating a life interest of
a 52-year-old male to take effect upon the termination of the
life of an 83-year-old male. Mr. Stewart applied this life-
interest factor of .36380 to the $158,000 figure he determined to
be the value of Joseph’s stock interests in JM and Specialty,
yielding a total life interest amount of $57,000. Mr. Stewart
then divided this number in half because Cyril had received only
a 50-percent life interest in Joseph’s stock. Mr. Stewart, in
recognizing that Cyril had obtained voting control over 100
percent of Joseph’s stock, applied a right-to-vote value of 7
percent on the other 50 percent of stock Joseph transferred,
$28,500, and arrived at a value of approximately $2,000 for
voting rights in 50 percent of Joseph’s stock. Mr. Stewart used
the 7-percent figure based on valuation publications which
suggest that voting rights for minority interests are accorded
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011