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factor, it appears that Mr. Frazier was referring to single-State
funds. Mr. Frazier’s screening process produced a sample of
eight funds.
Dr. Bajaj derives his sample from the list of 140 closed end
municipal bond funds set forth in the January 15, 1996 edition of
the Wall Street Journal. For reasons not entirely clear, Dr.
Bajaj excludes six of the funds from consideration, leaving a
sample of 134 funds.22 That sample includes numerous single-
State funds and funds with scheduled liquidation dates.
We agree with Mr. Frazier that funds with scheduled
liquidation dates should not be included in the sample. However,
given the fact that Louisiana-based obligations accounted for
approximately 75 percent of the value of MIL’s bond portfolio, we
are somewhat puzzled by Mr. Frazier’s exclusion of single-State
funds from his sample. Indeed, we believe that the sample should
consist entirely of single-State funds. We therefore utilize a
sample consisting of the 62 single-State funds in Dr. Bajaj’s
sample that do not have scheduled liquidation dates.
(3) Representative Discount Within the Range of Sample
Fund Discounts
As is the case with MIL’s equity portfolio, Mr. Frazier
concludes that the minority interest discount factor for MIL’s
bond portfolio should derive from the higher end of the sample’s
22 In his direct testimony, Dr. Bajaj states that the six
excluded funds “could not be identified in Morningstar Principia
dataset as of December 31, 1996".
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