Albuquerque, Rui; Schroth, Enrique - C.E.P.R. Discussion Papers - 2012
An inherent difficulty in valuing controlling blocks of shares is the illiquidity of the market. We explore the pricing … implications associated with the illiquidity of controlling blocks of shares in the context of a search model of block trades. The … model considers several dimensions of illiquidity. First, following a liquidity shock, the controlling blockholder is forced …