- 23 - measures, Ms. Walker concluded that the publicly traded equivalent value of Demco’s equity was $4,900,000. This is not materially different from the $4,914,000 value Ms. Walker determined using historical performance measures. Conclusion of Ms. Walker’s Original Report Giving great weight to the two guideline company approaches (historical performance and 1992 forecasted earnings), and giving very little weight to a capitalized distributions approach,15 Ms. Walker concluded that the publicly traded equivalent value of Demco’s equity was $4,890,000. After applying the 40-percent lack of marketability and 5-percent nonvoting discounts, Ms. Walker concluded that the fair market value of the Demco nonvoting common stock on the date of the gifts was $211.20 per share.16 Ms. Walker’s Revised Report In February 1999, Ms. Walker prepared a revised report appraising the value of the Demco stock. This report was prepared in response to respondent’s criticism that Ms. Walker’s original report had failed to include an income-based determination of Demco’s value. In response to respondent’s 15 See supra note 10. 16 The calculation is ($4,890,000) times (.6) times (.95) divided by (13,200) equals ($211.16) per share, which Ms. Walker rounded to $211.20.Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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