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Home tax-exempt entities, on the basis of use of the cost gap, of
$11,001,000.
To conclude his study, Wilhoite assigned a weighted
percentage to each of the three values he had derived under the
two market approaches and the single income approach. He gave
the most weight to the income approach, somewhat less weight to
the publicly traded comparable approach, and the least weight to
the merged or acquired comparable approach. His weighted average
was $11,604,000 for the MVIC. Wilhoite then took into account
the fact that, although they were ongoing businesses, the Sta-
Home tax-exempt entities had nevertheless generated a net working
capital deficit; i.e., the current liabilities exceeded the
current assets by more than $2 million. While sufficient current
assets would usually be present in an ordinary operating business
to pay for current liabilities, this was not the case for the
Sta-Home tax-exempt entities. A purchaser would quickly have to
come up with additional moneys to pay the bills. Wilhoite viewed
the necessity for such a “working capital infusion” as a factor
that would lower the value of the calculated MVIC. Thus, from
the $11,604,000 value for the MVIC, he subtracted the $2,020,000
deficit that a buyer of the Sta-Home tax-exempt entities would
have to provide following an acquisition of the companies.
To the resulting figure for the now-discounted MVIC,
Wilhoite added the companies’ current liabilities. He did so
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