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selection of measurement dates, sample funds, and representative
discounts within the range of the sample fund discounts.
(1) Measurement Date
Mr. Frazier calculates discounts for his sample of closed
end equity funds on the basis of January 11, 1996, trading prices
and December 22, 1995, NAV information. Dr. Bajaj, on the other
hand, utilizes trading prices and NAV data as of the valuation
date; i.e., January 12, 1996. We agree with Dr. Bajaj that, to
the extent possible, data from January 12, 1996, should be
utilized to determine discounts with respect to the sample funds.
(2) Sample of Funds
Mr. Frazier derives his sample of closed end equity funds
from the list of “domestic equity funds” set forth in
Morningstar’s Mutual Funds Guide. From that list, he purports to
exclude from consideration “special purpose” funds (i.e., those
primarily invested in a specific industry), funds with a stated
maturity, and funds “that had provisions regarding votes to open-
14(...continued)
investment (i.e., his pro rata share of the fund’s NAV). For
that reason, a share of a closed end fund typically trades at a
discount relative to its pro rata share of the fund’s NAV.
Since, according to the expert witnesses, that discount has no
marketability element, it is, to some extent, considered
reflective of a minority interest discount.
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