Control Premium (also referred to in German)

The amount an investor is willing to pay to obtain a controlling interest – generally in an investment and – in particular in a company (the amount paid to gain adequate ownership interest to control a corporation or other entity. This would usually be an amount in excess of the simple fair market value of the shares sought to be purchased). – Investors who only buy a minority holding often demand a corresponding discount (minority interest discount). This is because the majority shareholder decides, among other things, how the company’s assets are used, who manages the company, how the capital structure is structured and even whether the company should be sold (nominating the company directors and appointing its officers, declaring and distributing dividends, entering into contractual relationships with customers and suppliers, raising debt or equity capital for the company, hiring and dismissing employees, selling or acquiring assets or even vending the company). This justifies a control premium or a minority interest discount.

Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/