The Control Premium Calculator helps financial analysts and investors determine the premium paid over the market price for acquiring control of a company. This tool is essential in mergers and acquisitions to assess the value of gaining control.
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Data Source and Methodology
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The Formula Explained
Control Premium Formula: Control Premium (%) = ((Offer Price - Market Price) / Market Price) * 100
Glossary of Terms
- Offer Price: The price offered per share to acquire control of a company.
- Market Price: The current trading price per share.
- Control Premium: The percentage premium paid over the market price to gain control.
How It Works: A Step-by-Step Example
Assume an offer price of $150 per share while the market price is $100. The control premium would be ((150 - 100) / 100) * 100 = 50%.
Frequently Asked Questions (FAQ)
What is a control premium?
A control premium is the additional amount an acquirer is willing to pay over the current market price of a company to gain control.
Why is control premium important?
It reflects the value of gaining control of a company's strategic decisions and operations.
How do you calculate control premium?
Control premium is calculated based on the difference between the offer price per share and the current market price per share, expressed as a percentage of the market price.
What factors influence the control premium?
Factors include the strategic value of the company, market conditions, and the acquirer's objectives.
Are there risks associated with paying a high control premium?
Yes, paying too high a premium may not yield expected benefits and could affect the acquirer's financial position.
Formula (LaTeX) + variables + units
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Control Premium Formula: Control Premium (%) = ((Offer Price - Market Price) / Market Price) * 100
- No variables provided in audit spec.
- NIST — Weights and measures — nist.gov · Accessed 2026-01-19
https://www.nist.gov/pml/weights-and-measures - FTC — Consumer advice — consumer.ftc.gov · Accessed 2026-01-19
https://consumer.ftc.gov/
Last code update: 2026-01-19
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