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that the shares were worth $350, before considering a discount
for lack of marketability.
Because Gasiorowski considered the market method data to be
more reliable than the income method data, he gave the market
method result greater weight, and concluded that the marketable
minority value of the stock was $310.
Finally, Gasiorowski applied a 30- to 45-percent discount to
the estimated marketable minority value for lack of marketability
and liquidity. In selecting the size of the discount,
Gasiorowski considered various studies of the differences between
the private transaction prices for restricted shares of a
corporation and the contemporaneous sales prices for publicly
traded shares of the same corporation (the restricted stock
studies),8 and a series of initial public offering (IPO) studies
that compared the prices of shares sold in an IPO to the prices
of shares in the same corporation sold in relatively small
amounts no more than 5 months earlier in private transactions
(the IPO studies).9
8Restricted stock is stock acquired from an issuer in a
transaction exempt from the registration requirements of the
Federal securities laws. Sales of restricted stock are generally
restricted within the first 2 years after issuance.
9This was a series of updates to a study by John D. Emory.
The most recent, Emory, "The Value of Marketability as
Illustrated in Initial Public Offerings of Common Stock--November
1995 through April 1997", Bus. Valuation Rev. (Sept. 1997), was
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