An Economic Analysis of the Control Premium

The stock values are different from the controlling stockholder to other stockholder in M & As, that is the control premium. The controlling stockholder will use such kind of premium to get their private benefits. Theory research finds that the control premium is not only related to the Return on Equity, but also related to the paying cost to cover up the private benefits. It is negative correlation with the Return on Equity and positive correlation with the concealed cost.