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F. White Stallion
1. Marketable Minority Interest Values
a. Kimball Report
Mr. Kimball used the net asset value method to compute
controlling equity value of White Stallion. He relied on an
appraisal of land and improvements performed by Jeffery C. Patch
as of June 9, 1991, to derive the company’s underlying asset
value. With this information, Mr. Kimball adjusted White
Stallion’s June 4, 1994, balance sheet to reflect the fair market
value of assets and liabilities and calculated adjusted net asset
value of $1,138,698.78
Mr. Kimball then applied a 20-percent minority discount to
reflect the subject interest’s lack of control. Mr. Kimball
concluded that the marketable minority value of White Stallion as
of June 4, 1994, was $910,958.
b. Initial and Final Lax Reports
The initial and final Lax reports also used the net asset
value method to value White Stallion’s total equity, relying on
the same asset appraisal used in the Kimball report. Mr. Lax
adjusted White Stallion’s balance sheet as of April 30, 1994, to
arrive at net asset value of $1,139,080 as of June 3, 1994.
78Mr. Kimball’s calculations contained a mathematical error.
Adjusted net asset value should have been $1,139,000.
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