“There is no one generally accepted computational method” for DLOM, writes John Stockdale Sr. in the upcoming fifth edition of BVR's Guide to Discounts for Lack of Marketability. The book explains 11 different computational models and methods—all of which are controversial. However, most of them give good insight on the amount of the discount in one or more circumstances.
Much progress: There has been a lot of progress in terms of new evidence and studies, but disagreements continue about the validity of this new information. Nevertheless, Stockdale insists that these disagreements and conflicting viewpoints are valuable because “they indicate problems that need to be addressed in supporting the final conclusion as to the discount.” Consequently, no single study or method has emerged yet as being the best. Stockdale concludes: “An exciting time for the field of valuation lies ahead as theoretical developments and new evidence shed new light on the determination of the discount for lack of marketability.”
Please let us know
if you have any comments about this article or enhancements you would like to see.