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Dorman. Instead, we believe that the normalized value lies
somewhere between the two approaches.
In particular, Mr. Burns used the three most current years,
which left out the reduced income levels occurring from 1990
through 1994. Ultimately, Mr. Burns relied solely on normalized
1997 earnings to calculate value. Conversely, Mr. Dorman
emphasized the recessionary period by using a 4-year pattern and
leaving out the income increases in the 1997 year. Using Mr.
Dorman’s annualized 1997 income (which was almost the same as Mr.
Burns’s figure) and incorporating the figures for the 3 preceding
years, we decide that $2,400,000 represents the normalized
earnings for Godfrey, as follows:
Year Income Weight Weighted Income
1997 $3,085,615 4 $12,342,460
1996 2,497,222 3 7,491,666
1995 1,082,997 2 2,165,994
1994 1,958,688 1 1,958,688
Total 23,958,808
Divided by weight factor of 10
and rounded 2,400,000
Using a capitalization rate of 10 percent, we find that
Godfrey’s undiscounted fair market value was $24 million as of
September 15, 1997.
C. Discounts To Be Applied
Respondent’s expert, Mr. Burns, concluded that no minority
discount should be used to compute decedent’s interest in the
property. He reached that conclusion on the basis of his
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