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$6,800,000. On the basis of his review of studies similar to
those cited by Ms. Walker, Mr. Schroeder concluded that both lack
of marketability and nonvoting stock discounts should be applied.
Like Ms. Walker, Mr. Schroeder concluded that the lack of
marketability discount should be 40 percent. However, he
concluded that the nonvoting stock discount should be only 2
percent as opposed to the 5-percent discount proposed by Ms.
Walker.
Applying these discounts to his total equity value, Mr.
Schroeder concluded that under his market-based method the value
of the Demco nonvoting common stock on the date of the gifts was
approximately $2,840,000, or $303.03 per share. This is
approximately $92 per share more than Ms. Walker’s $211.20
market-based value. It is also approximately $33 per share more
than the $269.70 market-based value (and approximately $43 more
than the $260.13 overall value) determined in the earlier version
of Mr. Schroeder’s report, on which respondent relied in
preparing the statutory notices. See supra note 21.
Mr. Schroeder’s Income-Based Approach
Mr. Schroeder’s income-based approach differs from Ms.
Walker’s income-based approach in several important respects.
First, in his income-based approach Mr. Schroeder again treated
the media note as a nonoperating asset whose value should be
added to the present value of Demco’s predicted future income
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