- 49 -
Ms. Walker’s and Mr. Schroeder’s income-based appraisals
were lower than their market-based appraisals, at $175.24 per
share and $260.61 per share, respectively. However, we conclude
that those income-based appraisals are entitled to little weight
for the reasons set forth above.25
On the basis of the foregoing and all the other facts and
circumstances, we conclude petitioners have not shown that the
value of the Demco nonvoting common stock, as of the date of the
gifts, was less than $260.13 per share. To the contrary, the
record establishes that it was at least equal to that amount.
To reflect all the foregoing,
Decisions will be entered
for respondent.
25 We also note that both experts’ income-based analyses
probably understated Demco’s value, because they determined
Demco’s future cash-flows on a hypothetical after tax basis, and
then used market rates of return on taxable investments to
determine the present value of those cash-flows. See supra notes
19, 23.
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