# kaal:claim:4033886-023

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- prospective put model and related put option DLOM models

**Source quote.**

> 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), page 25

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

**Verify.** sha256 of source PDF `52ba05b1292b1be4bfaf1ee5cf56b14fea9c196d870603e794d7ee316df129bd` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20et%20al.%20-%202022%20-%20Digital%20Asset%20Valuation.pdf

**Failure mode.** perfect timing assumption  (family: valuation-and-pricing-failure)

**Topics.** economics, defi

**Keywords.** dlom, put-option-models, market-timing, illiquidity-discount

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