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discounts, then treating the media note as a nonoperating asset
would add approximately $35 per share to Ms. Walker’s values.
Erroneous Income Amount
The forecasted earnings measures Ms. Walker used in her
guideline company approach were significantly less than the
measures actually projected by Demco’s management. For example,
Ms. Walker’s original report stated that Demco was projecting
1992 EBIT of $1,372,000 and 1992 earnings of $1,034,615.
However, Demco was actually projecting that its earnings would be
approximately $400,000 higher; i.e., 1992 EBIT of $1,774,306 and
earnings of $1,434,198. We conclude that Ms. Walker simply made
a few transcription errors; nevertheless, these errors mean that
Ms. Walker’s appraisals significantly understated Demco’s value.
If the 1992 EBIT and earnings actually projected by Demco
were substituted for the erroneous amounts used by Ms. Walker,
then Ms. Walker’s appraisal of the Demco stock under her
forecasted earnings approach would have been approximately $289
per share, approximately $77 per share higher than the forecasted
earnings value set forth in her original report. The record does
not disclose Demco’s projected EBDIT for 1992. However, based on
Demco’s historical depreciation, we conclude that the measure of
1992 EBDIT used by Ms. Walker was, like her 1992 EBIT and
earnings measures, also approximately $400,000 too low. If Ms.
Walker’s measure of Demco’s 1992 EBDIT were also increased by
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