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hello Sir,
below is the extract from the business valuation article plz explain
the link for the article is;https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012s/sa_feb12_f9_valuationsv2.pdf
this is on the first page“Therefore, because minority holders have little power and no control, a 20% share of a
company should be less than 20% of its total value. Conversely, an 80% share should
be worth more than 80% of the full value of the company. Majority holders should be
prepared to pay a premium for control.”I assume you are wanting me to explain the paragraph that you have typed.
If we owned a company that was worth $100K, and I owned 80% and you owned 20%, then it is me who can dictate everything that the company does. You have no power at all – it is me who can decide everything.
Therefore it would be only reasonable that my share (if I was selling to someone) should be worth more than $80K and your share worth less than $20K.
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