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built-in indexing to place more emphasis on some categories over
others. For purposes of our analysis and clarification, we
replicate the table used by Mr. Dorman with the final column
showing the percentage discount he assigned with respect to the
19.99-percent interest in Godfrey:
Percent(%) of Discount Based
on Condition
Above Below Dorman’s
Good Average Average Average Poor Rating
1. Information availability
and reliability 1 2 3 4 5 2
2. Investment size 1 2 4 6 8 6
3. Company outlook, manage-
ment & growth potential 24 6 8 10 4
4. Ability to control 0 5 10 15 20 10
5. Any restrictions on trans-
ferability, anticipated
holding period and com-
pany’s redemption policy 25 8 11 14 8
6. Dividend payout history and
outlook 2 5 8 11 14 14
Total 8 23 39 55 71 44
Mr. Dorman’s report also contained references to discount
studies as background and/or to support his own approach. In
regards to the marketability discounts, Mr. Dorman discussed
various studies, including some that were relied on by Mr. Burns.
The majority of the studies referenced by Mr. Dorman, however,
resulted in marketability discounts ranging from approximately 26
percent to 45 percent, with most in the 32- to 35-percent range.
Most of the data for the studies referenced by Mr. Dorman were
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