The theory for the very significant discount was based on the risk that a hypothetical speculative buyer would be taking given that the Elkins did not want the artwork to be sold.
Traditionally, to entice institutional investors a newly-public business would have to sell shares at about a 15% discount to publicly-traded peers, compensating their new owners for the greater risk inherent in a company with an unproven track record on the public market.
Each year's number is discounted back to the present at a discount rate that accounts for the growth of the ten-year Treasury, inflation and equity risk, which stands right now at 8.4%.