kaal:claim:4033886-023

Put option based discount models for lack of marketability have been widely used, but they can be inaccurate because real investors do not possess perfect market timing ability.

Source quote, verbatim

This model has been widely used by market participants to determine the discount on nonmarketable security. However, this method can be inaccurate because investors do not have perfect market-timing ability.102

From

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022), III.3.a(1) Prospective Put Model (PPM), p. 25
https://ssrn.com/abstract=4033886 · source PDF

Cite as

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

Holds when

prospective put model and related put option DLOM models

Classification

failuresupport: arguedfailure: perfect timing assumptionfamily: valuation-and-pricing-failureeconomicsdefi

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