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assignment in particular, he was required to review significant
information regarding the company and interview Kohler
management.
Mr. Schweihs used the income approach and the market
approach to value the estate’s Kohler stock. Under the income
approach, Mr. Schweihs used not only the DCF method, but also the
discounted dividend method and the dividend capitalization
method. He recognized that the dividend methods were important
indicators of value where dividends represent the best, if not
the only, opportunity for a minority shareholder to receive a
cash return on his or her investment. Under the market approach,
Mr. Schweihs used the capital market method, also known as the
guideline company method. Mr. Schweihs did not use the
transaction method, unlike Dr. Hakala, because he was unable to
find transactions in companies sufficiently similar to Kohler
where there was adequate information available.
Mr. Schweihs also did not account for prior sale
transactions of Kohler stock in determining the value. He
determined that the transactions included a premium for being
able to be a shareholder in a prominent, privately held company
like Kohler, and that this premium could not be quantified.13
13We also note that the evidence of the pre-reorganization
transactions (including the $135,000 price received by the
dissenting shareholders in the litigation) is not helpful because
these transactions involve pre-reorganization stock, which is not
(continued...)
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