Minority Discount
Short definition
A minority discount is the inverse of a control premium: a non-controlling slice is worth less because it cannot steer cash and strategy. The rate is not universal; rights, dividends and company-law protection set it.
Detailed explanation
If the control premium is 25%, minority value ≈ control / 1.25. Stacking minority and illiquidity discounts can cut the same effect twice; split them.
Squeeze-out statutes can constrain the discount. The report must write the basis.
Why it matters for the CFO
A minority sale and a shareholder dispute lock price to this discount.
How it is calculated
Azınlık değeri ≈ Kontrol değeri × (1 − azınlık iskontosu)
Variables in the formula
- DLOC: Discount for lack of control
How to read it
Strong minority rights shrink the discount. An unclear dividend policy grows it.
Numerical example
Control value 1,000 mn TL, minority discount 20% → minority value = 800 mn TL.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.