Summary
This article analyzes arguments advanced against the use of restricted stock studies for the purpose of estimating discounts for lack of marketability. Those arguments amount to the claim that the discounts observed in restricted stock transactions reflect independent discounts for lack of marketability and risk. I argue that these discounts are in fact interrelated, such that removing liquidity restraints would eliminate the component of the discount that is thought to be attributable to risk.
Restricted Stock Studies and Discounts for Lack of Marketability
PDF, Size: 191 KB
Copyright American Society of Appraisers
The information contained in this product is based on content obtained by ASA from sources considered to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. BVR and ASA accept no liability for the use of such information which is provided "AS IS" and with no warranties, express or implied.