How do you handle the CoE for a family-owned company with a controlling owner?

Two perspectives:

• Strategic buyer: can apply the full CoE (CAPM + size premium) — they buy for 'public-market-equivalent pricing'.
• Financial buyer (PE): must add an illiquidity premium and middle-market discount on top, because exit options are more limited. The family-control complication: if the family wants to stay on as a minority, there is a 'control discount' for non-controlling stakes — historically 20–30% in academic studies. Valuation implication: the CoE method doesn't capture this directly — it's better handled as a downstream discount on equity value.