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factors. All of the expert reports in this case are subject to
criticism.
Mr. Weiksner describes his discounted cashflow analysis as an
estimation of the company’s value that “presumes certainty of
outcome and control of the company’s cash flows.” Consequently, he
asserts that the method results in an estimate of value that is
substantially higher than the public enterprise value of the
company determined under his comparable companies analysis.
Similarly, Mr. Weiksner opines that his comparable acquisitions
analysis generates control values that include a significant
premium to public values. In his discounted cashflow and
comparable acquisitions analyses, however, Mr. Weiksner assumed Mr.
DeJoria’s compensation would be $12 million in 1990 and $17 million
thereafter. That assumption clearly presupposes lack of control
and shows a minority interest value. Rather than demonstrating a
34-percent control premium, we find that Mr. Weiksner’s discounted
cashflow analysis demonstrates the inaccuracy of the comparable
companies method of valuing the stock in this case.
Mr. McGraw also set Mr. DeJoria’s compensation at $12 million
in 1990 and $17 million thereafter. Mr. McGraw properly did not
claim that the value he determined under the discounted cashflow
analysis demonstrates a control premium. In setting his discount
rate at 25 percent, however, he attributed 6 percent to the
individual risk, described by Mr. McGraw as the limited number of
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