What is a discount for lack of marketability (DLOM), when does it apply, and how is it typically quantified?

A DLOM reflects that a stake you can't readily sell is worth less than an otherwise identical liquid one — it applies to private companies or restricted/illiquid blocks, and is distinct from a minority discount (which is about lack of control). Quantification draws on empirical evidence: restricted-stock studies and pre-IPO studies historically suggested discounts often in the 20–35% range, and option-based models (e.g., a put option to proxy the cost of illiquidity over the expected holding period) give a more defensible, situation-specific figure. The size depends on holding period, volatility, dividend yield, and the realistic exit path. The trap is applying a generic 30% by rote rather than tailoring it to the actual marketability constraints.