control premium

control premium definition - business

control premium

The additional value of a block of shares that allows an investor to gain control of a business. A person or company owning 35% of a business is likely to pay a premium for additional shares that will lead to control of the firm. Control premium is particularly applicable to closely held companies in which there are few owners. Compare minority discount.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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