- By Todd G. Povlich, CFA, ASA
- September 18, 2018
Determining a discount for lack of marketability will be the subject of an upcoming presentation by Todd Povlich, Partner at MPI, at the 2018 NJCPA Business Valuation and Litigation Services Conference.
Povlich will be discussing the concepts of marketability and liquidity—which are slightly different, but intertwined—and the contexts in which these topics arise.
The business valuation industry is primarily consumed with valuing non-traded securities, restricted securities and closely held business interests. The fair market value for these is determined in cash-equivalent terms by the price at which a security would transact between willing buyer and a willing seller, however investors often pay less for an asset that is illiquid.
In his presentation, Povlich will explore widely-used techniques to develop marketability/liquidity discounts in business valuations. Numerous examples from MPI’s Restricted Stock database and published study will be reviewed and the process and advantages of multiple regression analysis will be discussed.
The conference will be held on September 27, 2018 in Iselin, NJ.
MPI, a prestigious national consulting firm founded in 1939, specializes in business valuation, forensic accounting, litigation support and corporate advisory work. MPI provides fairness opinions, sell-side and buy-side advisory services through its investment banking affiliate MPI Securities, Inc. MPI conducts every project as if it is going to face the highest level of scrutiny, and its senior professionals have extensive experience presenting and defending work product in front of financial statement auditors, management teams, corporate boards and fiduciaries, the IRS, other government agencies, and in various courts.