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Control Dilution and Distribution of Ownership

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Control Dilution and Distribution of Ownership

Bennedsen, Morten; Fosgerau, Mogens; Wolfenzon, Daniel

Document Version Final published version

Publication date:

2000

License CC BY-NC-ND

Citation for published version (APA):

Bennedsen, M., Fosgerau, M., & Wolfenzon, D. (2000). Control Dilution and Distribution of Ownership.

Department of Economics. Copenhagen Business School. Working Paper / Department of Economics.

Copenhagen Business School No. 16-2000 Link to publication in CBS Research Portal

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Download date: 05. Nov. 2022

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Institut for Nationaløkonomi

Handelshøjskolen i København

Working paper 16-2000

CONTROL DILUTION AND DISTRIBUTION OF OWNERSHIP

Morten Bennedsen Mogens Fosgerau Daniel Wolfenzon

Department of Economics

- Copenhagen Business School Solbjerg Plads 3, DK-2000 Frederiksberg

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Minimum cash flow 3 owners, one dom inating (n=222)

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Minimum cash flow 3 owners, one dominating >1/2 (n=138)

0 0.25 0.5 0.75 1

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Minimum cash flow three owners, two members of MCF coalition (n=442)

0 0.25 0.5 0.75 1

0.5 0.6 0.7

Minimum cash flow four owners, one dominating (n=52)

0 0.25 0.5 0.75 1

0.5 0.75 1

Minimum cash flow four owners, two members of MCF coalition (n=163)

0 0.25 0.5 0.75 1

0.50 0.60 0.70

Minimum cash flow four owners, two members of MCF coalition >1/2 (n=33)

0 0.25 0.5 0.75 1

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Second, granting that ownership means residual rights to control, this notion per definition only makes sense under incomplete contracting, since residual rights of control are