Chris Mercer

FEBRUARY 23, 2024

In Mercer’s Musings #2, we discussed the old and cold data on restricted stock transactions that have been misused by appraisers for decades. This conclusion applies to all appraisals, including those prepared for the Internal Revenue Service. In other words, value is a function of expected cash flow, growth, and risk.

Marketability 52

Marketability Terminal Value Dividends Discounted Cash Flow 52

Chris Mercer

AUGUST 1, 2022

This eleventh post in the Deja Vu series involving restricted stock studies addresses an issue that is rarely mentioned in the context of the studies – of the impact of dividends on restricted stock discounts (RSDs). Of these 244 transactions, only 24 involved companies that paid dividends, or less than 10% of the transactions.

Dividends 52

Dividends Appraisal Marketability Start-ups 52

Chris Mercer

MARCH 7, 2024

” And the answer holds regardless of any certifications appraisers might hold. The third musing illustrates the depth of analysis necessary to reasonably address the complexities and nuances in valuing illiquid minority interests of private companies. The value of the underlying enterprise or asset, if applicable.

Dividends 52

Dividends Appraisal Terminal Value Marketability 52

Chris Mercer

MARCH 29, 2024

Introduction and Conclusion My musings on the use of restricted stock discounts to estimate marketability discounts (or DLOMs) have led me to the conclusion: Restricted stock studies/discounts cannot be used to estimate DLOMs in any credible, standards-compliant manner. Three of the first four Mercer’s Musings posts address this issue.

Marketability 52

Marketability Appraisal Business Valuation Dividends 52

Chris Mercer

JULY 15, 2022

Business appraisers routinely use the discounted cash flow model to value entire businesses. Deja Vu #9: Pre-IPO Discounts Do Not Provide Valid Evidence for Marketability Discounts. These cash flows are discounted to the present at an appropriate discount rate and equity value is determined.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Dividends Appraisal 52

Chris Mercer

MARCH 8, 2023

This post provides a discussion of several implications of the definition of the standard of value known as fair market value. We focus first on the definition of fair market value. We then look at the implications for the so-called “marketability discount for controlling interests.”

Fair Market Value 52

Fair Market Value Marketability Appraisal Business Valuation 52