Do You Really Know Your Data for Determining Discounts?
The analysis of a popular data source used in determining discounts for asset-holding entities. An advanced understanding of the data is critical in order to avoid overvaluing your client’s investments by understating the discounts.
FMV introduces detailed Restricted Stock Study
We have lacked, until now, sufficient evidence to distinguish among discounts appropriate for investments with widely differing characteristics.
Mercer addresses court acceptance of the QMDM for DLOM
During a recent BVR webinar, an audience member asked about the track record in court of the quantitative marketability discount model (QMDM) for determining a discount for lack of marketability (DLOM).
Hitchner: stay abreast of DLOM valuation studies
Business appraisers “can expect to see a lot of new ideas and concepts, models that are no longer used, and models that haven’t been used but are popping back up,” said Jim Hitchner.
0% Reduction for Tax Affecting Affirmed
The 6th Circuit affirmed the Tax Court’s valuation of gifted minority interests in a closely held S corporation.
Restricted Stock Studies and Discounts for Lack of Marketability
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.
“Levels of value” chart to be updated to reflect difference in restricted stock versus private stock
The gap in discounts for lack of marketability for closely held stocks versus the discount for lack of marketability for restricted stocks of public companies has widened significantly in th ...
CPE events
DLOM: A Practical Look at a Complex Matter—Case Study—Part 2. December 14, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Pasquale Rafanelli (Empire Valuation Consultants). CPE credits: 2.0.
Critique of attacks on private placement and pre-IPO studies for determining marketability discounts
Two recent articles by John J. Kania, Ph.D., in Business Valuation Review 1 , regarding discounts for lack of marketability contain questionable facts and methodology, and could lead readers ...
Using Pre-IPO and Restricted Stock Data to Estimate Discounts for Lack of Marketability
Page 63 Page 63 June 2004 June 2004 Using Pre-IPO and Restricted Stock Data to Estimate Discounts for Lack of Marketability by Shannon Pratt, FASA, MCBA, CFA Introduction Business Valuation Review and Business Appraisal Practice recently published three very good articles on discounts for lack of marketability, but all contain im- portant omissions. All overlook the Valuation Advisors Lack of Marketability Discount Study,TM and none ad- dresses how to factor in the long-expected holding ...
Tax Court allows for ‘slight’ discount for lack of control for majority interests in real estate holding companies
In a gift and estate tax dispute, the estate and Internal Revenue Service agreed to apply discounts for lack of control and marketability to the majority interests in a number of real estate holding companies.
Preview of the March 2020 issue of Business Valuation Update
Here’s what you’ll see.
Preview of the June 2021 issue of Business Valuation Update
Here’s what you’ll see.
Candy Crush gets ‘crushed’ but other IPOs do well
The initial public offering market during the first quarter of 2014 was at its busiest since 2000.
Liquidity discounts: measuring the cost of buyer’s remorse
“Minority interests in private companies have not benefited from the increased liquidity in the public markets,” says Ashok Abbot, Ph.D. (West Virginia University).
Does using pre-IPO data for DLOM double count the discount?
The use of pre-IPO studies to measure a discount for lack of marketability has gained acceptance among valuation analysts and the Tax Court.
How to Use Put Options To Determine Discounts for Lack of Marketability
American Society of Appraisers 23rd Annual Advanced Business Valuation Conference October 7-9, 2004 ...
Two new studies support higher DLOM
Perhaps nothing in business valuation is more controversial than the discount for lack of marketability (DLOM). This one adjustment can have a sizable impact on clients' tax obligations.
Letter to the Editor: Will market volatility increase the risk of double counting?
In response to last week’s article entitled, “Reduced liquidity may lead to larger marketability discounts in the current economy,” (BVWire, Issue 73-1 ...
Marketability discounts: new empirical evidence and questionable attack
Two recent studies now on BVU Online Management Planning recently released a study on restricted stock transactions from 1980-1995,1and Robert W. Baird & Co. just completed the eighth instal ...
New articles announced from Journal of Business Valuation and Economic Loss Analysis
Berkeley Electronic Press’ latest issue of Journal of Business Valuation and Economic Loss Analysis includes the following articles ...
Video demonstrating the FMV DLOM Calculator available as a free download
In the BVR video “The FMV Calculator,” Kyle Vataha (FMV Opinions, Inc.) demonstrates the step-by-step use of the Calculator and answer listeners' questions.
DLOM, industry-specific valuations highlight CPE events
Valuing Insurance Agencies (January 19), with Lucas Parris (Mercer Capital).
CPE events
Valuing Midstream Oil and Gas Companies (January 27), with Tom Ramos (BDO Consulting) and Dan Visich (BDO Consulting).