Ask your own question, for FREE!
Finance 22 Online
OpenStudy (anonymous):

How do i calculate an illiquidity discount for a private company

OpenStudy (anonymous):

I am assuming you mean illiquidity by the fact that owners cannot cash out or sell the business anytime they want. This is a hard one and finance research is still trying to figure it out. I am not sure how you would calculate the discount because you have to compare it to some other benchmark in order to see whether if it is discounted or not.

OpenStudy (anonymous):

There are a couple of methods. I recommend you read "Business Valuation Discounts & Premiums" by Shannon Pratt for a good idea on the studies and approaches that are used.

Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!
Latest Questions
RAVEN69: My drawing so far is actually fire
1 week ago 9 Replies 2 Medals
PureSoulless: is staying at your friend's house while you're homeless legal.
2 weeks ago 5 Replies 1 Medal
whyjustwhy: i did that one TV girl trend with blake (aka @ShadowKid3)
1 week ago 12 Replies 2 Medals
whyjustwhy: i did that one TV girl trend with blake (aka @shadowkid3)
2 weeks ago 3 Replies 0 Medals
whyjustwhy: yo guys he can watch me sleep now (ignore dora)
3 weeks ago 24 Replies 1 Medal
Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!