Calculating Reliable Discounts for Lack of Marketability for Minority Family Limited Partnership Interest Using a Managed Asset Portfolio Market Analysis
We develop a new method for calculating reliable discounts for lack of marketability (DLOMs) for minority family limited partnership (FLP) interests, which we term the Managed Asset Portfolio Market (MAPM) Analysis. DLOMs typically are the largest valuation adjustment in, and often the most contentious part of, appraisals of closely-held company interests. U.S. Courts and the SEC require appraisal experts to calculate objective, market-based DLOMs that satisfy the Courts’ “gatekeeping” test to be qualified as expert testimony in litigation. Appraisals of market value are rooted in Economics and, as such, are inseparably linked to an underlying analysis of supply and demand. Although economic theory and principles are not absent in Business Valuation theory and practice, a market analysis often is only an implicit, and at times an unrecognizable, part of them. The MAPM Analysis is explicitly built upon an underlying economic foundation of market supply and demand, which, in conjunction with relevant publicly-traded market data, provides a relevant and reliable market basis for estimating DLOMs.
Year of publication: |
2013-03
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Authors: | Dawson, Peter C |
Institutions: | Department of Economics, University of Connecticut |
Subject: | MAPM Analysis | closed end fund | CEF | family limited partnership | FLP | DLOM | discount for lack of marketability | discount for lack of a market |
Saved in:
freely available
Extent: | application/pdf |
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Series: | |
Type of publication: | Book / Working Paper |
Notes: | The price is Free Number 2013-02 30 pages |
Classification: | D00 - Microeconomics. General ; D40 - Market Structure and Pricing. General ; D46 - Value Theory ; G12 - Asset Pricing ; K00 - Law and Economics. General ; K41 - Litigation Process |
Source: |
Persistent link: https://www.econbiz.de/10010961319