The Initial Public Offerings (IPO) on the Warsaw Stock Exchange in the Years 2006, 2007. The Issue Costs and the Value of the Discount Rate for Lack of Marketability (DLOM)

The article presents transaction costs connected with selling assets, as well as the value of liquidity for investors, and the methods of including the lack of marketability (DLOM) in the process of valuing private companies. The studies results concerning the illiquidity discount, presented in the article, indicate that its level fluctuates considerably depending on the adopted research method. There is, however, a consensus as to the fact that the liquidity of an asset prays an important role for the investor and in the lack thereof the investor can demand a compensation in the form of a lower purchase price or a higher rate of return. Taking into consideration the share of initial public offering costs in the total offer value on the Warsaw Stock Exchange in the years 2006 and 2007, and at the same time keeping in mind the limitations of such an approach, as discussed earlier, the illiquidity discount calculated on this base for the Polish companies can be estimated to be about 5.0-8.5%