Discount for Lack of Control (DLOC)

A reduction applied to the pro-rata value of a business interest to reflect the lack of control associated with a minority ownership position. Minority discounts account for the inability of minority shareholders to influence key decisions such as dividend policy, asset sales, and management appointments.

A reduction applied to the pro rata value of a business to reflect the disadvantages of owning a non-controlling interest, including inability to direct business strategy, set compensation, force distributions, or compel liquidation. The minority interest discount is the mathematical complement of the control premium and is typically applied when valuing interests of less than 50% in private companies.

The additional amount a buyer pays above the pro-rata market value of a company's shares to acquire a controlling interest. The control premium reflects the value of being able to direct the company's strategy, operations, capital allocation, and management.

A reduction applied to the value of an ownership interest to reflect the lack of a ready market in which to sell the interest quickly and at full value. Also known as a discount for lack of marketability (DLOM), this adjustment is particularly significant for private company valuations where shares cannot be readily traded on a public exchange.

A reduction applied to the value of an ownership interest to reflect the absence of a ready market for its sale. DLOM is commonly applied to interests in private companies where shares cannot be easily traded on a public exchange.

The phenomenon where the market values a diversified conglomerate at less than the aggregate value of its individual business units if they were operated independently. The conglomerate discount — typically estimated at 10% to 15% — reflects investor concerns about capital allocation inefficiency, cross-subsidisation, management complexity, and reduced transparency across disparate business lines.

A reduction to business value reflecting the risk that the departure of one or more critical individuals would materially impair the company's earnings, relationships, or operational capability. Key person discounts are most significant in professional services, early-stage ventures, and founder-led businesses where revenue concentration or specialised expertise is tied to specific individuals.

Government regulations that restrict the transfer of specified goods, software, technology, and technical data across national borders for reasons of national security, foreign policy, or non-proliferation. Export controls in the UK are administered under the Export Control Act 2002, while the US uses the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR).

What is the weighted average cost of capital (WACC)?

WACC is the average cost of all capital sources (debt and equity) a company uses, weighted by their proportions — it is the minimum return the company should generate to satisfy all investors.