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Direct empirical valuation of corporate control has been hampered by the absence of systematic observable data and verifiable equilibrium models. This paper provides a new analytical framework for valuing voting rights, linking the value of control to the distribution of shares among shareholders along with corresponding Shapley and Owen Power Indices. The new framework presented here transforms values generated by power indices into game theory/equilibrium financial values We illustrate our model using numerical methodologies based on share prices paid by agents seeking to control firms as well as market prices paid by shareholders who simply defer control to other agents. The paper also derives a simple version of a demand function for corporate control in a setting similar to Jensen and Meckling [1]. Using a unique data set of dual class shares, we compare empirical methodologies estimating the value of control to the analytical methodology provided in this paper.

The 1986 Tax Reform Act is likely to extend optimal holding periods of depreciable assets until the point in time at which the tax basis is exhausted. Additionally, practitioners in the real estate markets tend to argue that the 1986 Tax Reform calls for a major reduction in depreciation tax benefits. Despite the reduction in benefits, values of depreciable properties may nevertheless rise. This paper analyzes various tax legislations in terms of the effect these legislations have on the optimal trading policy for depreciable assets. The tax code of the 1981 accelerated cost recovery system (ACRS), the 1984 ACRS, and the new 1986 Tax Reform Act are compared.