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the medians for highway and heavy construction companies. A
larger percentage indicates that equity holders receive a higher
return, in relation to the book value of their investment in the
company. Petitioner's ratio was -2.4 percent in 1995 and 11.9
percent in 1996. The medians for companies in the four
subcategories with sales between $1 and $10 million were between
11.2 and 20.4 percent in 1995 and between 11.1 and 19.1 percent
in 1996.
Dr. Lacey's analysis has a fatal flaw; none of the 12
publicly traded companies he selected was reasonably comparable
to petitioner. All of them were much larger than petitioner,
particularly in terms of their respective annual sales. The
largest company, FW, had sales of $3.04 billion in 1995 and $4
billion in 1996. The smallest company, GoC, had sales of $12.77
million in 1995 and $13.16 million in 1996. Eight of the
companies had gross receipts in excess of $100 million in 1995
and 1996. Another had gross receipts in excess of $90 million in
1995 and $133 million in 1996. Of the three remaining smaller
companies (gross receipts between $12 and $50 million), Dr. Lacey
eliminated two companies (GoC and UC) from many of his
calculations because they showed losses in both 1995 and 1996.
Dr. Lacey concluded that petitioner's return on equity would
not satisfy the expectation of a reasonable investor because the
return was below the median and average returns of the publicly
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