ANALYTICS XL puts Montgomery Investment Technology’s full set of marketability-discount models inside Excel, as functions rather than a fixed calculator. An analyst can develop a DLOM, document the assumptions behind it, and revise them in the same workbook that holds the rest of the valuation.
The five models exist because no single one fits every engagement. The Finnerty models (2002 and 2012) are the everyday choice for restricted or post-vest shares. Longstaff answers a narrower question, the most a discount could be if a holder timed the sale perfectly, and serves as a bound. Ingersoll shifts the lens to the individual holder, weighing the size of the illiquid position and their tolerance for risk. Chaffee offers the most direct framing, treating the discount as the price of protecting against a fall in value before the shares can be sold.
Running the models as Excel functions keeps every input on the page, which is what makes a discount defensible under audit. ANALYTICS XL is part of the FinTools XL library, used by valuation experts, auditors, and corporate officers, and built on models in use for over thirty years.
DLOM Functions
- Finnerty 2012 The Finnerty Average-Strike Put Option (2012) model to calculate the Discount for Lack of Marketability (DLOM)
- Finnerty 2002 The Finnerty Average-Strike Put Option (2002) model to calculate the Discount for Lack of Marketability (DLOM)
- Longstaff The Longstaff model provides an estimate of the DLOM assuming the seller of the shares has perfect market knowledge, and is able to time his sale to maximize the proceeds.
- Ingersoll The Ingersoll model for calculating the Discount for Lack of Marketability (DLOM) is based on financial theory that includes elements from option pricing and economic utility frameworks. It is designed to evaluate the DLOM by considering the illiquidity of an asset and the market variables that affect its price.
- Chaffe The Chaffe Model, also known as the “European Put Option Model,” estimates the DLOM as the value of a European-style put option on the common shares with a strike price equal to the share price on the valuation date.
