Minority Compensation and Discount Rate Practice: Evidence from 223 Czech Squeeze-Outs (2005–2024)
Minority Compensation and Discount Rate Practice: Evidence from 223 Czech Squeeze-Outs (2005–2024)
Author(s): Tomáš Podškubka, Jakub Novák, Petr JablonskýSubject(s): National Economy, Business Economy / Management, Micro-Economics, Political economy, Sociology of the arts, business, education, Law on Economics
Published by: Vysoká škola ekonomická v Praze
Keywords: Minority shareholder compensation; Discount rate; Squeeze-out; Valuation report; Cost of capital; Transparency; Risk premium;
Summary/Abstract: Analyzing 223 Czech squeeze-out valuation reports from 2005–2024, this study examines discount rate construction as a governance mechanism influencing minority compensation. We document the persistent dominance of the CAPM model, a shift toward domestic risk-free anchors, and evolving practices in WACC iteration and parameter transparency. Central to this study is the introduction of a novel 12-parameter ‘Transparency Index’ used to statistically test the verifiability of valuation reports over time, while also analyzing the applied company-independent equity market risk premium. Our findings reveal a statistically significant rise in report transparency, a curtailed use of excessive equity market risk premiums, and their improved consistency. These trends correlate with increased judicial scrutiny and legislative reforms in Czechia, suggesting that regulatory pressure has successfully disciplined valuation practices.
Journal: Prague Economic Papers
- Issue Year: 35/2026
- Issue No: 2
- Page Range: 221-248
- Page Count: 28
- Language: English
