The Existence and Explanations for the Private Company Discount*

In this study, we seek to establish the existence and examine explanations for the private company discount applied by investors when they value the controlling interest in a private firm. Our four main findings are summarized as follows. First, we show the existence and estimate the magnitude of the PCD actually applied by investors when they acquire a private company. Employing both a univariate and a multivariate approach that controls for …