Discounts for Lack of Marketability

Put models are often used to calculate a discount for lack of marketability (DLOM) for non-traded equity securities in complex capital structures. I confronted problems with the existing methods because they did not provide different DLOMs for securities of different risk and they did not provide a way to calculate DLOMs relative to a transaction in a non-marketable security. The paper, “Thoughts on Calculating DLOMs,” Business Valuation Review, 33, 2, (2014), 102 – 112 shown here addressed both of those problems.