Charles T. McCord, Jr. and Mary S. McCord, Donors - Page 71

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          registered private placements (i.e., because such shares can be             
          sold in the public market).  However, the results of the private            
          placement studies indicate that even registered private placement           
          shares are issued at a discount, although such discounts tend to            
          be lower than those observed in unregistered private placements.            
          Dr. Bajaj explains that phenomenon by positing that privately               
          placed shares, whether registered or unregistered, tend to be               
          issued to purchasers of large blocks of stock who demand                    
          discounts to compensate them for assessment costs and anticipated           
          monitoring costs.  He states:  “The discount offered to buyers is           
          a compensation for the cost of assessing the quality of the firm            
          and for the anticipated costs of monitoring the future decisions            
          of its managers.”                                                           
                    b.  Refinement of Registered/Unregistered                         
                         Discount Differential                                        
               Dr. Bajaj further contends that the additional discount                
          typical of unregistered private placements (as compared to                  
          registered private placements) is not entirely attributable to              
          the fact that unregistered shares, unlike registered shares,                
          generally cannot be sold in the public market.  Rather, he                  
          contends that such differential is attributable in part to higher           
          assessment and monitoring costs incurred in unregistered private            
          placements as compared to registered private placements.  In                
          support of his theory, Dr. Bajaj suggests four factors that might           
          have a correlative relationship to assessment and monitoring                





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