Should Substantial Discounts Apply to Very Short Holding Periods?

What factors impact marketability discounts in restricted stock transactions? Typically, an investor's expected holding period is the primary determinant of the size of the marketability discount. But the regulations governing restricted stock have eased significantly since 1990. Effective Feb. 15, 2008, the minimum holding period was reduced from one year to six months. Our firm, Stout Risius Ross

What factors impact marketability discounts in restricted stock transactions? Typically, an investor's expected holding period is the primary determinant of the size of the marketability discount. But the regulations governing restricted stock have eased significantly since 1990. Effective Feb. 15, 2008, the minimum holding period was reduced from one year to six months. Our firm, Stout Risius Ross (SRR) studied this shorter holding period to quantify how this change impacts discounts as well

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