Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
andsold. Thevalueof thesefirms isnotreported,and the illiquiditydiscountisthedifferencebetweenthevalueandthe price.Inthissection ...
shouldbereplacedwithsmallerdiscounts.Inrecentyears,the courtshavebeguntolookfavorablyatthesearguments.Ina 2003 case, 66 theInter ...
assetsareliquidandcanbesoldwithnosignificantlossin value.Aprivatefirmwithsignificantholdings ofcashand marketablesecuritiesshoul ...
51 percentstakeinaprivatebusinessshouldbemoreliquid than a 49 percent stake in the same business. 67 Theilliquiditydiscountisals ...
revenues and the size of the restricted stock offering. He reported the following regression. where RPRS=Restrictedstockprice/Un ...
Consider again the regression that Silber presents on restrictedstock. Not only doesit yielda resultspecific to restrictedstock, ...
There are clearly dangers associated with extending a regression run on a small number of restricted stocks to estimatediscounts ...
earlier)ranasimilarregressionwith 106 privateplacements between 1980 and 1987 and also found larger private placementdiscounts a ...
small company listed over-the-counter is muchless liquid than a midsize company listed on the New York Stock Exchange, which in ...
negativeand 1 ifpositive),cashasapercentoffirmvalue, and trading volume. Plugginginthecorrespondingvalues—withatradingvolume ofz ...
The value of liquidity ultimately has to derive from the investorbeingabletosellatsomepredeterminedpriceduring thenontradingperi ...
Basedonitsexpectedgrowthrateof6.36%forthenextfive yearsand4%thereafter,wehaveestimatedavalueof$1.796 million for the firm today, ...
nondiversificationandnotforilliquidity.Wecanestimatethe illiquidity discount for Kristin Kandy, using any of the approaches desc ...
The option value was estimated using the Black-Scholesmodel.Theprobabilitywasestimated, using the expected return of 16.26% for ...
Theotherapproachtodealingwithilliquidityistoadjustthe discount rate used in discounted cash flow valuation for illiquidity. In p ...
periods. Using data from 1984–2004, Venture Economics estimated that the returns to venture capital investors havebeen about 4 p ...
Thethreedifferentapproachestoadjustingdiscountratesare similartotheapproachesusedtoestimateilliquiditydiscounts onvalue.Theconst ...
Thefirsttermisthepresentvalueofannualcashflowsduring theholdingperiod—$0.60(60percentof$1) growingat 4 percentayearforthenextfiv ...
rateforilliquidity,otherthantonotethatitcanbebackedout of observed illiquidity discounts in restricted stock studies. ILLUSTRATI ...
discount. If we increase discount rates for illiquidity in perpetuity ratherthan the fiveyears that we used in both calculations ...
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