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Mar 29, 2024 · I am the Chairman of Mercer Capital, a national business valuation and financial advisory firm. I have been a business valuation professional for over 35 years providing valuation and corporate advisory services for litigation, transaction, and tax-related purposes.
- The Case for the Disappearing Minority Interest Discount - Chris Mercer
Many appraisers developed indications of value for 100% of a...
- About | Chris Mercer
I am the founder and Chairman of Mercer Capital, a national...
- The Case for the Disappearing Minority Interest Discount - Chris Mercer
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- Historical Background
- The Minority Interest Discount
- Step 1 For The Disappearing Minority Interest Discount
- Step 2 For The Disappearing Minority Interest Discount
- Step 4 For The Disappearing Minority Interest Discount
- Is There A Minority Interest Discount?
- Wrap-Up
The original levels of value chart suggested that the minority interest discount was the equivalent dollar amount as a corresponding control premium from the base marketable minority level of value. That level is named by reference to trading of minority interests in the public securities markets. The levels of value chart had three levels as in th...
The math of the minority interest discount was fairly straightforward. To eliminate the control premium of 40% from the example above, we engage in a bit of basic algebra: The minority interest discount calculated from the 40% control premium in our example above is 28.6% [1 – (1/(1+0.40))]. The averages of control premium studies tended to be in t...
In 1990, Eric Nath wrote an article for the Business Valuation Review of the American Society of Appraisers titled “Control Premiums and Minority Interest Discounts in Private Companies.” The core idea in this article was considered by many appraisers (including me at the time) as heresy. It took some time for Nath’s novel idea to catch on, but it ...
By the mid-1990s, many business appraisers, including me, had realized that most of the transactions in control premium studies involved strategic (or synergistic) intent, and that control premiums were paid, not for the prerogatives of control, but for the ability to enhance the cash flows of an acquisition through expected operating synergies, en...
We have said that there is congruence between the marketable minority and financial control levels of value. Nevertheless, some would argue, if not further, then repeatedly. The problem is that minority investors in public companies do have significant elements of control relative either to financial control owners or owners of illiquid minority in...
It is a truism that no valuation premium or discount has any meaning unless the base to which it is applied or taken is specified. Consider the following: 1. The base level of value to which any control premium is applied is the marketable minority (or the marketable minority/financial control) level. Control premiums can be observed in the marketp...
As I mentioned, Travis Harms and I are working diligently to complete the third edition of Business Valuation: An Integrated Theory. This post is an offshoot of those efforts. If you would like to be notified when the new book becomes available, please send me an email at: mercerc@mercercapital.com As always, I welcome comments on this blog. Unless...
Chris Mercer (commonly known as “Mercer”) and Junko Mercer started a marketing company in 2011 in Austin, Texas, USA. Initially, our company produced Online Courses to teach people how to use WordPress to create websites.
I am the founder and Chairman of Mercer Capital, a national business valuation and financial advisory firm. I have been a business valuation professional for over 35 years providing valuation and corporate advisory services for litigation, transaction, and tax-related purposes.
Z. Christopher Mercer is the Chairman of Mercer Capital. Chris began his valuation career in the late 1970s. He has prepared, overseen, or contributed to hundreds of valuations for purposes related to tax, ESOPs, buy-sell agreements, and litigation, among others.
Dec 14, 2021 · Chris Mercer is the Founder and Chairman of Mercer Capital. Chris began his valuation career in the late 1970s. He has prepared, overseen, or contributed to hundreds of valuations for purposes related to tax, ESOPs, buy-sell agreements, and litigation, among others.
