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Schroeder is associated with the St. Louis area office of Mentor
Valuations, Inc. Like Ms. Walker, Mr. Schroeder is a member of
the American Society of Appraisers and holds the Accredited
Senior Appraiser (business valuation) designation. Mr.
Schroeder’s report employed both a guideline public company
approach and an income-based approach to appraise the value of
the Demco stock.
Mr. Schroeder’s Guideline Company Approach
Except for its treatment of the media note (discussed
immediately below) and its conclusion as to value, Mr.
Schroeder’s guideline company approach was quite similar to Ms.
Walker’s. In fact, Mr. Schroeder used Ms. Walker’s calculations
of Demco’s net revenues and net income as the starting point for
the derivation of his performance measures. He also used two of
the guideline companies chosen by Ms. Walker, Educational
Development Corporation and Library Bureau, Inc. However, Mr.
Schroeder used only four performance measures and three guideline
companies to derive Demco’s value; this is far fewer than the 12
21(...continued)
There are only two material differences in methodology
between the two versions of Mr. Schroeder’s report. First, in
his 1999 report, Mr. Schroeder treated the media note as a
nonoperating asset (see infra p. 32); he had not been able to do
this in his 1996 report due to a lack of financial data. Second,
in his 1999 report Mr. Schroeder gave his income-based value for
Demco’s stock approximately twice the weight of his market-based
value; he had given his income and market-based values
approximately equal weight in his 1996 report.
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