-77-
1993, 1994, or 1995, multiplied by the liquidation value of each
redeemed share at the beginning of the applicable year; “i”
equals the annual dividend rate; “n” equals the total number of
days in the year; and “y” equals the number of days in a year
over which dividends were compounded.48 Preferential dividends
accrued daily on each share of series A preferred stock at the
annual rate of 8.5 percent during 1989, 9.83 percent during 1990,
11.17 percent during 1991, and 12.5 percent during 1992 and at
all times thereafter until the share was either redeemed or
exchanged.49 Our methodology in Trompeter I reflected our
finding that holders of series A preferred stock were entitled to
receive dividends not simply at an annual rate of 8.5-, 9.83-,
11.17-, or 12.5-percent, but at those rates as adjusted to
reflect daily compounding.
Upon remand, we have redetermined that dividends were
payable at the annual rates without compounding. In other words,
the amount of dividends payable on a share of series A preferred
stock was ascertained for each year simply by multiplying the
48 In other words, we used the basic formula for computing
future value in the case of interest that is compounded annually,
see generally Thorndike’s Compound Interest and Annuity Tables 7
(1982), and adjusted that formula to reflect our finding in
Trompeter I that the preferential dividends payable on the series
A preferred stock compounded daily.
49 Holders of series A preferred stock were entitled,
subject to minimal restrictions, to exchange their series A
preferred stock for Sterling’s series B subordinated debentures
due Dec. 31, 1995. See appendix C.
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