-36-
Mr. Schweihs also determined that the prices paid in the
transactions were not justified by analyzing the company’s
historical and expected future performance.
Mr. Schweihs also did not rely on the asset-based approach
because Kohler is a going concern operating company. An asset-
based approach, in his view, generally is not a reliable
indicator of value for going concern companies.
Mr. Schweihs applied a 45-percent lack of marketability
discount to the values he determined under the DCF method and the
capital market method, and a 10-percent lack of marketability
discount to the values he determined under the discounted
dividend method and the capitalization of dividends method. He
used a lower discount for lack of marketability under the
dividend methods because, in his view, the dividend method more
directly reflected the value of the shares. Mr. Schweihs also
determined that a 26-percent discount for lack of control applied
to the value he determined under the DCF method.
Mr. Schweihs weighted the DCF method and the capital market
method each 20 percent in his final analysis, and gave 30 percent
weights to each of the dividend methods. He concluded that the
fair market value of the Kohler stock the estate owned on the
13(...continued)
the stock we value in this case. For example, the pre-
reorganization stock did not have the same transfer restrictions
and purchase option (thus affording purchasers more liquidity),
and the capital structure was different.
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011