Studies of Restricted Stock Sales Since 1990 Indicate a Median

question 77

True/False

Studies of restricted stock sales since 1990 indicate a median liquidity discount of about 20 percent with several showing a decline to 13 percent after 1997 following the holding period change under Rule 144 from two years to one.

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Definitions:

Revenue Expenditures

Expenditures that are immediately charged against revenues as an expense.

Ordinary Repairs

Expenditures to maintain the operating efficiency and productive life of the unit.

Capital Expenditures

Capital employed by a business to buy or enhance tangible assets like land, factories, or machinery to boost long-term business activities.

Period of Ownership

The duration for which an asset is owned by an individual or entity, affecting capital gains for tax purposes.