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141 results in a value that hypothetically Increases the return on the investment to compensate the owner for the risks associated with anon marketable interest. Finally, it is important to recognize that discounts for lack of marketability are not a “black‐and‐white issue. Some valuators distinguish between a discount for illiquidity and a discount for lack of marketability.
As previously discussed, a controlling interest is perceived as having more value than anon controlling interest therefore, the interest being considered may only need to factor in the cost to sell or make the interest liquid leading an valuator
to apply a lesser discount, i.e., only a discount for the illiquid nature of the interest. If the interest being appraised is anon controlling interest, it adds a level of “salability,” in essence asking the question what price would a prudent investor being willing to pay fora minority interest
in anon marketable company, considering all of the facts An ownership interest is not simply marketable freely tradable in a public market, or “non‐marketable,” not freely tradable. This represents degrees of marketability and the final DLOM depends on the facts and circumstances of the specific subject interest. The following are some factors that affect
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