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“weighted” share value of $44,868. He explained that “[t]he
market approach is weighted less at 30 percent due to the lack of
perfect comparables”. Lastly, he adjusted that value upward to
account for certain nonoperating assets: 1,099 acres of so-
called excess land with a stipulated value of $2,000 an acre
(total value: $2,198,000) and $5.25 million of “excess cash”.
Before making that upward adjustment, however, he applied certain
discounts. He applied a 25-percent “minority” discount and,
sequentially, the above mentioned 25-percent “liquidity” discount
to the stipulated value of the land, reducing such stipulated
value to $1,236,375, or $778 a share. He applied the additional
25-percent “minority” discount in recognition of the fact that
the land value “cannot be readily realized by the minority
shareholder.” He applied the same 25-percent minority discount
(but not the liquidity discount) to the so-called excess cash,
resulting in a value of $3,939,000, or $2,477 a share. He
derived his share value for Korbel of $48,123 ($48,100 rounded)
and total value of decedent’s 630 shares (rounded) of $30,300,000
after making the aforesaid adjustments to the value of the
nonoperating assets.
Petitioner’s Expert
Petitioner offered Mukesh Bajaj, Ph.D (Dr. Bajaj), as an
expert witness, to testify concerning the valuation of closely
held companies. Dr. Bajaj is a managing director, finance and
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