Clarissa W. Lappo - Page 20

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          exceeded the average discount observed in registered private                
          placements by 17.6 percentage points.16  The differential                   
          reported in the Hertzel & Smith study is 13.5 percentage                    
          points.17  Those figures are consistent with the differential               
          reported in the Bajaj study, 14.09 points.18  The average of                
          these three figures is approximately 15 percent, which yields a             
          liquidity premium of 17.6 percent (1/[1 - .15]).19                          
               Using a liquidity premium of 17.6 percent, we arrive at                
          minority interest discounts of 18.4 percent (.8-percent price-to-           
          NAV discount less 17.6-percent liquidity premium) for the April             
          16, 1996, gifts and 16.12 percent (1.48-percent price-to-NAV                
          premium less 17.6-percent liquidity premium) for the July 2,                
          1996, gift.  Following Dr. Shapiro’s lead, we round these figures           
          up slightly to a uniform 19-percent minority interest discount              
          rate, which we shall apply to the real estate component of the              
          partnership interests.                                                      





               16 Bajaj et al., “Firm Value and Marketability Discounts,”             
          27 J. Corp. L. 89, 98 (2001).                                               
               17 Id. at 99.                                                          
               18 Id. at 107.                                                         
               19 As Dr. Shapiro explains in his expert report:  “If an               
          illiquid security trades at a discount of 7% relative to a liquid           
          asset, the liquid asset is trading at a premium of about 7.5%               
          from the illiquid asset [1/(1-7%)].”                                        




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