How Probability Affects Discounts for Lack of Marketability

Business Valuation UpdateVol. 20 No. 7
July 2014
Marc Vianello, CPA, ABV, CFF

Summary

Traditional methods for determining a discount for lack of marketability (DLOM) fall short for several reasons. Restricted stock and pre-IPO studies do not have a sufficient number of transactions, and they do not reflect “price risk.”