Woodward has discovered, calculated and published current market, unbiased discounts for lack of marketability through isolating discounts implicit in more than 300 OTC firm convertible debt issuances—see Business Valuation Review, Spring 2010.  We have also updated the data summarized in this publication through August 2010 to create the most up-to-date lack of marketability data available.

A publicly traded Woodward client inadvertently created a perpetual option as part of a privately placed convertible debt issuance.  A third party fair value of the option was then required to allocate debt proceeds between primary debt and equity for the Company’s audited financial statements, per APB No. 14.  Perpetual options are rare and usually theoretical, for example, Barron’s argued that Lehman Brothers’ stock was essentially a perpetual option as of September 2008.  Woodward successfully valued the perpetual option, communicated with the Company’s auditors and created auditable worksheets, calculations and a report in less than one week—allowing the Company to file its 10-Q on time.  Click here for more information on perpetual options.