Hi, Regarding GPCM, when do we add the control premium?

Given the following example:

MV Debt: 1 100 000

Normalized EBITDA: 12 800 000

Average MVIC/EBITDA = 8

The company we are valuing is more risk, so we deflate the multiple by 20%

Adjusted multiple: 8 x (-0.2) = 6.4

Vo = 6.4 x 12 800 000 = 81 920 000

Ve = 81 920 000 - 1 100 000 = 80 820 000

Lets assume that the transaction I was comparing with was for a non controlling interest and I was taking a controlling interest. And the Control Premium is 10%. Would I then simply add 10% to the equity part at the end of my calculation?

Ve = 80 820 000 x 1.10 = 88 902 000

Vo = 88 902 000 + 1 100 000 = 90 002 000

If I was comparing with a company that was acquired for a controlling interest and I was looking at it from a minority shareholder would I then deduct the control premium at the end? Control Premium is 10%.

where did you get that example? if you come up with the numbers yourself, well, from my experience in Topic Tests, the control premium of 10% is added to the multiple of MVIC/EBITDA.

Therefore, in your case, the MVIC/EBITDA multiple is 8 x 0.8 (where is this 20% discount coming from) x 1.1 or 7.04

and then you find MVIC

and then you deduct market value of debt from MVIC to find market value of equity

with normalized ebitda at 12,800,000 and a multiple of 7.04, MVIC is 90,112,000

and your example suggests that market value of debt is 1,100,000