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registered private placements which, unlike an assignee interest
in MIL, did not suffer from impaired marketability. Similarly,
it is likely that the “high” category is dominated by
unregistered private placements which, unlike the sale of an
interest in an investment company, entailed relatively high
assessment and monitoring costs. Accordingly, we look to the
“middle” group of private placements in Dr. Bajaj’s sample in
determining the appropriate marketability discount for an
assignee interest in MIL. The average discount of that group of
private placements was 20.36 percent.42 We are not persuaded
that we can refine that figure any more to incorporate
characteristics specific to MIL.
b. Conclusion
We find that a discount for lack of marketability of 20
percent (rounded from 20.36 percent) is appropriate in
determining the fair market value of each half of the gifted
interest.
E. Conclusion
We conclude that the fair market value of each half of the
gifted interest is $4,941,916, determined as follows:43
42 That discount is consistent with the average discount
(20.14 percent) observed in the Hertzel & Smith private placement
study, supra note 34, the study (other than his own) primarily
relied upon by Dr. Bajaj.
43 For ease of computation, we determine the fair market
value of a 1-percent interest.
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