The Factors Affecting the Control Premium Size

Abstract

Author: Ivan Ivanovich Rodionov - National Research University "Higher School of Economics." Email: irodionov@hse.ru

Questions concerning applying and establishing the size of control premiums and discountsrelate to fundamental issues of business valuation. The size of control premium can significantly affect the estimated fair market value of business or shares. In each case, the control premium, depend on the set of specific to each type of business factors: internal factors, such as the estimated stake of shares unit weight, the concentration degree of share capital, voting mode, and external factors, such as the legal form of company orlegislative restrictions. This article provides an overview and analysis of these and other factors that may directly or indirectly affect the control premium size.