- 49 -
This potential overlap and the apparent failure to separate the
minority interest and marketability discounts cause us to
question Mr. Heebink’s conclusion. On the other hand, Mr.
Engstrom’s conclusion of a 25-percent marketability discount is
reasonable under the circumstances of this case. Where
appropriate, we consider a 15-percent minority interest discount
and a 25-percent marketability discount in determining the fair
market value of HII stock.
Conclusion
The record reflects a range of values per share for HII
stock, which we summarize as follows:
Redemption analysis - Mr. Heebink1 $104,000
Net asset value analysis - Mr. Engstrom1 119,000
Valuation analysis - Mr. Heebink1 128,000
Guideline companies analysis - Mr. Engstrom2 219,000
Prior redemption transaction - Mr. Engstrom3 329,500
Stockholders agreement - Mr. Engstrom3 380,000
1Minority interest and marketability discounts applied.
2Marketability discount applied only.
3No discounts applied.
Because valuation necessarily results in an approximation, the
valuation figure we determine need not be one as to which there
is specific testimony as long as it is within the range of values
that may properly be arrived at from consideration of all the
evidence. See Estate of Magnin v. Commissioner, T.C. Memo. 2001-
31. After considering all the evidence, the values that
petitioners’ and respondent’s experts derived in their various
analyses, other factors, and appropriate minority interest and
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