Court of Chancery Explains Valuation Principles
Berger v. Pubco Corp., C.A. 3414-CC (May 10, 2010)
This decision explains 2 points of appraisal law. First, when the discounted cash flow approach is used to value a company, no control premium is added to the result. That sort of premium is only used when the valuation is based on comparable market prices or "comps" that reflect the minority discount inherent in the price of a small block of stock.
Second, at least in this case, there is no deduction for the capital gain tax due on the sale of assets by a holding company. Instead, those assets are valued on a pre-tax basis.
