Mercer’s Musings #2: Using Restricted Stock Studies to Support Marketability Discounts
In “Mercer’s Musings #2,” the focus shifts to the examination of restricted stock studies and their application in determining marketability discounts for gift and estate tax appraisals, offering valuable insights for appraisers across all credential spectrums. Highlighting the inherent challenges of such studies, I underscore the lack of economic relevance these studies hold in contemporary valuation scenarios, particularly emphasizing their disconnect with current private company valuations. Through an analysis and a hypothetical valuation scenario, I invite readers to explore the nuanced complexities of applying marketability discounts, advocating for a quantitative approach informed by common sense, judgment, and reasonableness.