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determination of value in her original report.
Ms. Walker was a principal of Willamette Management
Associates, Inc., when she prepared her original report. She was
a principal of Columbia Financial Advisors, Inc., when she
prepared her revised report; she was still a principal of
Columbia at the time of trial. Respondent stipulated Ms.
Walker’s qualifications and expert status.
Ms. Walker’s Original Report
In her original report, Ms. Walker relied almost entirely on
the “guideline public company”, or “market-based”, approach to
appraise the fair market value of the Demco stock.10 In one
variation of this approach, Ms. Walker calculated several
measures of Demco’s historical financial performance; she then
used her guideline company data to determine how the public stock
markets would have valued a company with those performance
measures. In the other variation, Ms. Walker applied the
guideline public company data to three measures of Demco’s
projected financial performance for 1992, the year of the gifts.
10 Ms. Walker’s original report did include one “income-
based” approach, in which Ms. Walker appraised Demco’s value by
capitalizing Demco’s distributions to stockholders for 1991 (as
adjusted by Ms. Walker). However, Ms. Walker concluded that this
approach deserved very little weight.
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