Business Valuation Matters of Privately Controlled Enterprises
Dispelling the Myths About Control Premiums
In business valuations, fewer concepts seem more widely misunderstood than the control premium. Users of valuation reports often assume that a controlling interest is entitled to a control premium. Conversely, they assume that a minority interest should receive a minority interest discount.
It’s not quite that simple, though. For one thing, whether a premium or discount is appropriate depends on the “level” of value. Even if a control premium is appropriate, quantifying the premium is a challenge — and subject to ...