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Liquidity discount, also known as marketability discount, refers to the reduction in the valuation of the firm due to lack of an efficient market for such securities. Comparable companies which are listed on exchanges are valued higher since there is a ready market for trading such securities. Thus the highest liquidity discount is assigned to a company which has the most illiquid assets and it is very difficult to assess the value of the assets of the organization. In this case, the highest discount would be assigned to the money-losing laundry. This is because the laundry is currently making losses and it is...
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