59 and partly because the Brazilian government has
significant influence in the company.
60 Assuming a probability of 20% that management will
change, we estimated the value per nonvoting and voting
share:
With our assumptions, thevotingshares should trade ata
premium of 10.4% over the nonvoting shares. If the
probability of management change increases, we would
expect the premium to increase.
ItshouldbenotedthatthenonvotingsharesinEmbraer do
have some advantages that may offset some or all of the
control premium. Nonvoting shares have a prior claim to
dividends over voting shares and they also pay higher
dividends.Inaddition,ahigherpercentageofthenonvoting
sharesareavailabletothepublicandtraded,thusleadingto
higherliquidity; only 19% of thevotingshares are traded
whereas90%ofthenonvotingsharesaretradedeitheronthe
Bovespa (34%) or on the New York Stock Exchange (56%).
Private Company Valuations
Asolelyownedprivatecompanyisusuallyrunbyitsowner,
anditsvaluewillreflectthequalityofhisorherdecisions.