Valuation: Comps & Precedents
What is a control premium and a minority discount, and how do they relate the comps and precedents methods to each other?
Model answer
A control premium is the extra amount a buyer pays above the current public trading price to acquire control of a company (typically a meaningful percentage over the unaffected price). A minority…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Valuation: Comps & Precedents
- What are the main valuation methodologies?
- Why might trading comps and precedent transaction comps give different values?
- Why is EV/EBITDA often preferred over P/E for comparing companies?
- What are the three primary valuation methodologies a banker uses, and in one line each, what is each based on?
- Which of the standard valuation methodologies tend to produce the HIGHEST and the LOWEST values, and why?
- Walk me through how you perform a comparable companies analysis.