The market value premium is determined by the stock market. There is no science behind this.
Dec 17 2013 04:01 PM
The market premium depends on various factors including company performance, competition, macro economic factors, local politics etc.
So the bottom line is there are many kinds of value for a company - book value, market value, DCF value, comparables value.
Bankers typically look at all these valuations before finalizing on the valuation of a company