Calculating Market Value of Minority Interest
Greetings Oasis community,
My question for you is, how do you calculate the market value of minority interest?
Naturally, minority interest is reported at book value on a company's balance sheet, and I am wondering how I would derive the market value of that interest given the book value. I would imagine the calculation would change depending on the specific caase, but I'm wondering if there is any sort of formula or short-cut that can be used to derive the market value.
Cheers.
There are some cases where the minority interest is a listed company (for instance, LVS and Sands China - 1928 HK, or MGM and MGM China - 2282 HK) - there you have a straightforward mark to market.
Otherwise, you need to value the subsidiary (gross up the earnings if all else fails and put a multiple on it?) and then adjust for the percentage that the parent does not own, which would be "market value" for the minority.
How to correctly value minority interests? (Originally Posted: 03/09/2015)
I have looked at the company Fluor. In their latest 10k the noncontrolling interests are 112,9 MUSD in the balance sheet. However, the income attributed to noncontrolling interests have been from 114-136 MUSD the last three years. How would you value the minority interest in order to deduct from EV and get fair value of equity? I see different approaches:
How would you value the minority interests?
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