Control Premiums, Explained: Why 51% of a Company Is Worth More Than 51% of Its Value
A 51% stake commands a 20–40% control premium over pro-rata value, pricing the power to set dividends, strategy, and sale timing.
#business-valuation
Business Valuation
Methods and best practices for determining the fair market value of a business
Fair Value vs. Fair Market Value: Why Your Business Has Two Different Numbers
Fair market value is the IRS willing-buyer price with minority discounts; GAAP fair value is the undiscounted exit price in your principal market.
No-Shop vs. Go-Shop, Explained: How Merger Agreements Control the Search for a Better Offer — Solicitation Bans, the Go-Shop Window, Fiduciary Outs, and Two-Tier Breakup Fees
A no-shop bars soliciting rival bids after signing; a go-shop allows a 30-to-60-day market check with a reduced breakup fee if a better offer wins.
Fair Value Hierarchy, Explained: How ASC 820 Ranks What Your Numbers Are Built On
ASC 820 ranks fair-value inputs in three levels — market quotes, observable inputs, unobservable models — and the lowest significant input sets the level.
Locked Box vs. Closing Accounts: How Buyers and Sellers Fix the Purchase Price
A locked box freezes the price on an old balance sheet, so interim profit goes to the buyer; closing accounts true it up at closing. Which side each favors.
Tangible Book Value, Explained: What Your Company Is Worth After Stripping Goodwill and Intangibles
Tangible book value is shareholders' equity minus goodwill and intangibles — the liquidation floor banks still trade on, read via P/TBV.
Liquidation Preference, Explained: Who Gets Paid First When Your Startup Exits
A 1x non-participating liquidation preference pays investors back before common sees a dollar — participating preferred double-dips on top.
Appraisal Rights, Explained: How Dissenting Shareholders Force a Court to Price Their Shares
Appraisal rights let a dissenting shareholder refuse the deal price and take court-determined fair value instead — with no minority discount.
The Graham Number, Explained: The Maximum Price Benjamin Graham Would Pay for a Stock
The Graham Number — the square root of 22.5 × EPS × BVPS — caps what a defensive investor pays: below it, research the stock; above it, pass.
Participating vs. Non-Participating Preferred Stock: How the Double Dip Decides Your Exit Payout
Participating preferred pays investors twice — preference first, then a pro-rata share. Non-participating pays only the greater of the two.
The PEG Ratio, Explained: How Dividing P/E by Earnings Growth Separates a Fair Price From an Expensive One
PEG ratio divides P/E by earnings growth — around 1.0 is fairly valued, below 1.0 may be cheap if the growth is real.
Owner Earnings, Explained: Buffett's Measure of What a Business Really Earns
Owner earnings equal reported earnings plus non-cash charges minus maintenance CapEx — the cash you could withdraw without shrinking the business.