Regression Analysis and Discounts for Lack of Marketability

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American Society of Appraisers Business Valuation Review™
Spring 2011 Volume 30, Issue 1 pp. 36-48
Ezra Angrist
Harry Curtis, III, CFA, ASA
Daniel Kerrigan, CFA


This article develops a multivariate regression model to identify factors that impact the discounts observed in the private placement of publicly traded stock. The predicted private placement discounts derived from the model can be used as a basis for determining discounts for lack of marketability for ownership interests in closely held companies or illiquid blocks of publicly traded stock. The regression model features a combination of transaction-specific and company-specific data and also takes into account contemporaneous market conditions. The results from the model thus reflect both unique attributes of each company as well as the market environment on the valuation date.
Regression Analysis and Discounts for Lack of Marketability
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