Discounts and premiums must be supported with empirical data

Business Valuation Update
September 21, 2001
Shannon P. Pratt, CFA, ARM, ABAR, FASA, MCBA, CM&AA
discounts & premiums
pre-IPO study, restricted stock study, sic code


In my April 2001 Editor's Column I discussed the treatment of marketability discounts in court cases, and briefly touched on empirical data to support those discounts. This column is a follow-up and includes an expanded discussion of the empirical studies available not only for marketability discounts, but for control premiums and minority discounts as well.