Evaluation Of Corporate Control Premiums Based On BS And BH Models

The reform of mixed ownership of state-owned enterprises is a reform that really involves the level of property rights,and is of great significance for improving China's basic economic system.The mixed reform of state-owned enterprises is of great significance for enhancing the competitiveness and vitality of China's state-owned enterprises and improving the future capital market,and has created a governance system that conforms to modern corporate governance.Mixed ownership reform is not simply privatization or nationalization.It is a win-win situation between state-owned capital and the non-public economy.The mixed reform of state-owned enterprises is accompanied by the transfer of control.The success of the change of property rights directly depends on whether the transaction price is reasonable during the transfer of control rights.If the price is too low,it may cause the loss of state-owned assets.If the price is too high,it may suppress the enthusiasm of private enterprises for capital.Therefore,a reasonable control pricing mechanism is particularly important.However,through an in-depth study of the securities market,when analyzing the earnings owned by shareholders,we found that large shareholders have more than common shareholders.This is the private interest of our control in the usual sense.In order to obtain such private benefits,the majority shareholder's shareholding ratio must reach the actual control ratio.This is called shareholders' control.In order to obtain this kind of control,the controlling shareholder must pay a certain additional fee before the purchase,which is the premium generated during the transfer of control.The control premium has become one of the core concepts of corporate finance and corporate governance in the capital market.Since most of the controlling shareholders of China 's listed companies are state shares and legal person shares,and the nature of their shares is non-tradable shares,the control trading market is not active,and Western control premium assessment methods are not applicable to China.Therefore,there is an urgent need for a pricing method suitable for China's control premium.This article comprehensively analyzes four evaluation methods,and selects the more applicable bulk equity transfer premium method and real option method for research.First of all,on the basis of sufficient summation of relevant literature at home and abroad,it is found that most of the literature is an empirical analysis of the factors affecting the control premium,and there is a lack of quantitative analysis of the control premium.Therefore,this paper analyzes the influence of internal and external factors on the control premium based on the theory of control premium.Among them,internal factors include enterprise size,financial status,and shareholding structure,and external factors include macroeconomic conditions,legal policies,and external supervision,and the “shell” resources of listed companies.Secondly,combining the theory of source of control premium and the research methods of scholars at home and abroad,the applicability analysis of the four evaluation methods of real option method,large stock premium method,voting right premium method and large and small equity matching method is carried out.In thecourse of research,it was found that the control right can be regarded as a kind of "management option" in essence.Investors are willing to pay a premium in order to obtain control right in the transaction,mainly because they have the right to manage and make decisions on the enterprise.In order to obtain income.Combined with the actual situation of China's securities market,the real option method and the bulk equity transfer method were used to evaluate the control premium.The BS model and the BH model were used respectively.When determining the parameters in the BH model-equity transfer price,it was also introduced in detail.The application of the FCFE model in the evaluation of equity prices.Finally,Gree Electric transferred 15% of the equity to Zhuhai Mingjun as an example.The two evaluation methods were applied to the case evaluation to determine the evaluation parameters.The parameters were brought into the model to evaluate the control premium and the results were obtained.From the perspective of the selection of evaluation methods,explore the difference between the results of the two evaluation methods.At the end of the article,I put forward some relevant opinions on the future control trading market.