A Model for Pricing Controlling Stock Blocks

This research provides a model for pricing of controlling stock blocks and determinants of control premium. Pricing of 64 stock blocks of Tehran Stock Exchange listed companies with size of 16.67 and more are reviewed. These blocks mostly were priced at substantial premium to the exchange price. In this research by reviewing literature and surveying financial and investment professionals determinants of pricing and control premium are find out and then by using multivariate regression significant factors are determined and at the end the estimated block prices are compared with the real price of blocks. Results show that significant factors in pricing controlling stock blocks and determining control premium are block size, firm size, leverage, profitability and previous performance, previous ownership of buyer and deadline to pay cash payment.