The effect of liquidity on non-marketable securities

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2 Scopus citations


We generalize the prevailing theoretical models that estimate the discount on securities for lack of marketability, by considering the discrete trading frequency of the securities. The generalization shows that accounting for the illiquidity of securities may significantly reduce their non-marketability discount. Further, the method reconciles the approaches of Longstaff (1995) and Finnerty (2012a), which are special solutions of our method.

Original languageEnglish
Pages (from-to)139-144
Number of pages6
JournalFinance Research Letters
StatePublished - Sep 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier Inc.


  • Illiquidity
  • Non-marketability discount
  • Thin-traded securities


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