- 32 -
In sum, we are unpersuaded that Mr. Herber has adequately
supported his recommended 25-percent discount for lack of
marketability.
c. Conclusion
On the basis of all the evidence, and using our best
judgment, we hold that a lack of marketability discount of 35
percent is appropriate for decedent’s shares of RBI stock. This
discount is at the higher end of the narrow range that Mr. Herber
identified in his report and is consistent with the average
discount that Mr. Schroeder derived from the restricted stock
studies.16
5. Conclusion
We conclude that for September 26, 1997, the fair market
value of decedent’s shares of RBI stock is $721,297 ($220.18 per
share), computed as follows:
Total aggregate value of RBI stock $26,266,667.00
5.09 percent of value of stock 1,336,973.00
Less: 17-percent minority interest
discount (227,285.00)
1,109,688.00
Less: 35-percent discount for
lack of marketability (388,391.00)
FMV of decedent’s shares 721,297.00
FMV per share (3,276 shares) 220.18
16 Although we believe that the IPO studies Mr. Schroeder
used are entitled to some consideration, we do not find that
those studies justify a discount greater than 35 percent.
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