- 6 - Mandelbaum v. Commissioner, supra; Estate of Trenchard v. Commissioner, supra. Some of the factors examined by courts in determining the amount of an appropriate lack of marketability discount are: (1) The cost of a similar corporation's public and private stock; (2) an analysis of the subject corporation's financial statements; (3) the corporation's dividend-paying capacity, its history of paying dividends, and the amount of its prior dividends; (4) the nature of the corporation, its history, its position in the industry, and its economic outlook; (5) the corporation's management; (6) the degree of control transferred with the block of stock to be valued; (7) any restriction on the transferability of the corporation's stock; (8) the period of time for which an investor must hold the subject stock to realize a sufficient profit; (9) the corporation's redemption policy; and (10) the cost of effectuating a public offering of the stock to be valued. See Estate of Gilford v. Commissioner, supra at 60; Mandelbaum v. Commissioner, supra; Rev. Rul. 77-287, supra. Additionally, a control premium may be appropriate when valuing a large block of stock. A control premium represents the additional value associated with the shareholder's ability to control the corporation through his dictation of its policies, procedures, or operations. See Estate of Chenoweth v. Commissioner, 88 T.C. 1577, 1581-1582 (1987); Estate of Trenchard v. Commissioner, supra; Rev. Rul. 59-60, 1959-1 C.B. 237, 242. This premium for control is distinct and separate from anyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011