Glossarytaught in E11.02
Minority discount
Also called lack of control discount.
The other side of a control premium. A stake that cannot direct the business is worth less per share than one that can.
If control commands a 26.1% premium, the matching minority discount is 20.7%, since the two are the same gap measured from opposite ends.
The discount is relevant in private company valuation, in family settlements, and in valuing an unlisted stake held inside a listed group. It rarely applies to an ordinary listed share, because the quoted price is already a minority price.
Which end you measure from changes the number. Say which.