Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
managementchanginginthisfirmisπ.Sincethenonvoting shareshaveabsolutelynosayinwhetherthemanagementcan be changed, the value per n ...
great deal of control over how the firm is run. Although goldensharesarenottraded, theywillaffect thevaluesof shares that are tr ...
higherthepremiumonvotingsharesshouldbe.Since the expected value of control is divided by the number of voting shares to get the ...
smallestinwell-managedfirmsandinfirmswherethevoting shares are concentrated in the hands of insiders and management. Empirical E ...
nonvotingstockholdersandlargerforcountrieswithoutsuch protection. 55 Someofthesestudiesmentionedalsohypothesize(andtest) forwhyv ...
thepremiumonvotingsharesandasubsequentreformofthe law in 1999 reversed both effects. 58 Insummary,thepremiumforvotingsharesrefle ...
59 and partly because the Brazilian government has significant influence in the company. 60 Assuming a probability of 20% that m ...
Sinceahostileacquisitionofsuchacompanyisnotfeasible, theexpectedvalueofcontrolwillbecomeanissueonlywhen the private company is f ...
itover.Thus,whenacquiringa 51 percentstakeofafirm, youshouldbewillingtopay 51 percentoftheoptimalvalue forthatfirm.Ifyouaresettl ...
inthefirm,whereyoupresumablycanaffectcontrol,youare in a position to alter both the likelihood of management changingandhowitwil ...
acquisitions become a muchsmaller percentage of the equity. In a publicly traded firm with widely dispersedholdings,controlmaybe ...
discountinprivatetransactionssincethereisnomarketvalue to compare the transaction price to. Harouna,Sarin, andShapiro(2001)attem ...
ILLUSTRATION 13.6: Estimating the Minority Discount Assume that you are valuing Kristin Kandy, a privately ownedcandybusinessfor ...
changed.Itisourcontentionthatthemarketvalueofevery firm reflects the expected value of control, which is the productoftheprobabi ...
valueexceedsthevalueofcontinuinginthebusiness;ifitis, divestituremakessense.Afterall,whenabusinessisearning poorreturns,itisunli ...
9 J.H.Mulherinand A. B.Poulsen, “ProxyContests and Corporate Change: Implications for Shareholder Wealth,” Journal of FinancialE ...
14 H. DeAngelo and E. M. Rice, “Antitakeover Charter AmendmentsandStockholderWealth,”JournalofFinancial Economics11 (1983): 329– ...
find thatwhile 37 percent arewidelyheld, 44 percent are family controlled, with dual-class shares and pyramid structures. Smalle ...
of hostile takeovers and management change than other companies. 24 K. G. Palepu, “Predicting Take-Over Targets: A Methodologica ...
AccountingandEconomics 16 (1993):273-316;S.Pufferand J.B.Weintrop, CorporatePerformance andCEOTurnover: The Role of Performance ...
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