Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
are also closely held. Thus, the discounts estimated from these small samples have to be considered with caution. Initial Public ...
Williamette Associates extended this study to look at transactionsinthethreeyearspriortoinitialpublicofferings, adjustedforchang ...
Thesizeofthediscountisstrikinginbothofthesestudies.It isdifficulttoseewhyaninvestorwouldbewillingtoaccepta 40 percent discounton ...
auctionand privateplacementpricesoftheRISsharesand conclude that the discount on the latter is 78 percent for auctions and almos ...
59 Infact,HullandWhite(2004)bringthistendencytoward early exercise into the valuation of employee options by assumingthatexercis ...
valuebusinesses(andthereturnstheyearn)atdifferentstages of the life cycle. 62 Theyconcludethattheprivatecompanydiscountisonly 11 ...
Both the theory and the empirical evidence suggest that illiquiditymattersand thatinvestors attachalowerpriceto assetsthataremor ...
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 ...
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