John E. Wall - Page 36




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               Setting these objections aside for the moment, Mr. Schroeder           
          calculated his income-based value of Demco as follows.  First, he           
          calculated the present value of Demco’s 1992-96 projected net               
          income, by discounting it at his 15- to 17-percent rates.                   
          Second, he computed a 1997 residual value for Demco, by assuming            
          that Demco’s 1996 projected net income would grow at 3 percent              
          per year in perpetuity and capitalizing that income at his 17-              
          percent rate; he then discounted that terminal value back to a              
          present value as of the date of the gifts.  Third, he added the             
          foregoing values together and applied his 17-percent minority               
          discount, to arrive at an income-based minority equity value of             
          $4,770,010.  Fourth, he added the face amount of the media note             
          to arrive at a total equity value of $5,850,010.  Fifth and                 
          finally, he applied his 40-percent lack-of-marketability and 2-             
          percent nonvoting discounts, to arrive at rounded values of                 
          $2,440,000 or $260.61 per share.  This is approximately $85 per             
          share higher than Ms. Walker’s $175.24 per share income-based               
          value.                                                                      
               Mr. Schroeder’s Conclusion                                             
               Mr. Schroeder made his overall appraisal of Demco’s value by           
          combining his income-based and market-based values and giving the           
          income-based value approximately twice as much weight.  In Mr.              
          Schroeder’s overall opinion, the fair market value of the Demco             







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