Control premiums and minority discounts: the need for
specific economic analysis |
The traditional “levels of value” chart is applicable in
some situations, but not all. In this article, the
30-year business valuation veteran challenges the
conventional procedure, explains its shortcomings, and
offers an alternative procedure.
Most valuation experts are familiar with the standard
concepts of valuation premiums and valuation discounts.
We have seen them routinely applied in substantially the
same form by the IRS and valuators in hundreds of
valuations over the past two decades.
The objectives of this article are:
1. To review the current methodology in these areas;
2. To show the weaknesses and strengths of these
approaches, and
3. To suggest other specific valuation techniques that
may be more appropriate.
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