Impact of Transfer Restrictions on Stock Prices Calculator
Start date = 0/0/0
End date = 0/0/0
Blocked period (T) =
Risk free interest rate (r) = 2
Dividend yield (q) = 2
Volatility (s) = 30
This model is based on the study "The Impact of Transfer Restrictions on Stock Prices" by John D. Finnerty, Professor of Finance, Fordham University, New York.
The model is an average strike-put option model for calculating the marketability discount on restricted shares.
Contributed by Aleid Langevoord
The model can be used to calculate the discount on restricted shares.
In this example the fair market value of the shares without restrictions is 100
Risk free interest rate is 2%
Dividend yield is 1.5%
Volatility is 30%
The shares may not be transferred during 2 years.
The discount calculated by this model is 14.1%
The fair market value of the shares with transfer restrictions will therefore be 85.9%
Blocked period (T)
Risk free interest rate (r)
Dividend yield (q)