A Current View of the Restricted Stock Studies and Restricted Stock Discounts

BVResearch Pro
American Society of Appraisers Business Valuation Review™
Summer 2021 Volume 40, Issue 2 pp. 44-60
Z. Christopher Mercer, ASA, CFA,
discount for lack of marketability (DLOM)
restricted stock study, discount for lack of marketability (DLOM), discounts & premiums, valuation methodology, marketability, guideline transaction method

Summary

Although there is relevant evidence in some restricted stock studies that can be helpful for marketability discount determinations, comparisons with average discount observations from these studies do not provide a meaningful methodology to estimate marketability discounts. We conclude this despite the fact that too many valuation analysts continue to rely on simplistic comparisons with averages of restricted stock discounts from dated studies in their marketability discount determinations.
A Current View of the Restricted Stock Studies and Restricted Stock Discounts
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