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Control Premium Formula

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Control Premium is the additional amount that an investor is willing to pay to acquire a controlling interest in a company compared to the current market value of the company's equity. Check FAQs
CLP=TPR-MPEP
CLP - Control Premium?TPR - Takeover Price?MP - Market Price?EP - Estimated Price?

Control Premium Example

With values
With units
Only example

Here is how the Control Premium equation looks like with Values.

Here is how the Control Premium equation looks like with Units.

Here is how the Control Premium equation looks like.

1.0029Edit=5005Edit-1495Edit3500Edit
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HomeIcon Home » Category Financial » Category Mergers and Acquisitions » fx Control Premium

Control Premium Solution

Follow our step by step solution on how to calculate Control Premium?

FIRST Step Consider the formula
CLP=TPR-MPEP
Next Step Substitute values of Variables
∴ CLP=5005-14953500
Next Step Prepare to Evaluate
∴ CLP=5005-14953500
Next Step Evaluate
∴CLP=1.00285714285714
LAST Step Rounding Answer
∴CLP=1.0029

Control Premium Formula Elements

Variables
Control Premium
Control Premium is the additional amount that an investor is willing to pay to acquire a controlling interest in a company compared to the current market value of the company's equity.
Symbol: CLP
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Control PremiumOpen Variable
Takeover Price
Takeover Price represents the total consideration offered by the acquirer to the shareholders of the target company in exchange for their ownership stake.
Symbol: TPR
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Takeover PriceOpen Variable
Market Price
Market Price refers to a place where buying and selling of products is done at a specified market price set by the market forces.
Symbol: MP
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Market PriceOpen Variable
Estimated Price
Estimated Price refers to the expected or projected amount that one party (acquiring company) is willing to pay to acquire another company.
Symbol: EP
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Estimated PriceOpen Variable

Other formulas in Mergers and Acquisitions category

​Go Accretion Amount
AA=((PB)⋅(YTMAPPY))-CI
​Go Takeover Premium
TPM=PT-VT
​Go Gain of Acquirer
GAQ=S-(PT-VT)
​Go Post Merger Value of Merged Company
PMV=PVA+VT+S-C

How to Evaluate Control Premium?

Control Premium evaluator uses Control Premium = (Takeover Price-Market Price)/Estimated Price to evaluate the Control Premium, Control Premium reflects the value associated with having control over strategic decisions, management appointments, and operational policies. Control Premium is denoted by CLP symbol.

How to evaluate Control Premium using this online evaluator? To use this online evaluator for Control Premium, enter Takeover Price (TPR), Market Price (MP) & Estimated Price (EP) and hit the calculate button.

FAQs on Control Premium

What is the formula to find Control Premium?
The formula of Control Premium is expressed as Control Premium = (Takeover Price-Market Price)/Estimated Price. Here is an example- 1.002857 = (5005-1495)/3500.
How to calculate Control Premium?
With Takeover Price (TPR), Market Price (MP) & Estimated Price (EP) we can find Control Premium using the formula - Control Premium = (Takeover Price-Market Price)/Estimated Price.
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