Section 1 - Instruction

So far, we've seen how control adds value (a premium) and how a lack of marketability subtracts value (a discount). Now, let's practice applying these two critical adjustments together.

Engagement Message

Ready to start the exercises?

Section 2 - Practice

Type

Multiple Choice

Practice Question

A minority stake in a public company trades for $100. An acquirer buys a controlling stake in a similar but private company. Which adjustments are likely needed?

A. Control premium only B. Marketability discount only C. Both a premium and a discount D. No adjustments needed

Suggested Answers

  • A
  • B
  • C - Correct
  • D
Section 3 - Practice

Type

Sort Into Boxes

Practice Question

Sort these factors based on whether they relate to a Control Premium or a Marketability Discount.

Labels

  • First Box Label: Control Premium
  • Second Box Label: Marketability Discount

First Box Items

  • Power to fire CEO
  • Ability to sell company
  • Setting strategy

Second Box Items

  • No public market
  • Long sale process
  • Hard to find buyers
Section 4 - Practice

Type

Fill In The Blanks

Markdown With Blanks

An investor buys a 10% stake in a private family business. Because the shares are hard to sell, a [[blank:marketability discount]] is applied. If the investor had bought a 60% stake instead, they would also pay a [[blank:control premium]] for the ability to make key decisions. The discount [[blank:reduces]] value, while the premium [[blank:increases]] it.

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