Supermajority vote requirements and state dissolution statues are the factors that influence:

Supermajority vote requirements and state dissolution statutes are legal or contractual provisions that can grant a minority interest holder significant rights. A supermajority provision can give a minority block the power to prevent major corporate actions (i.e., blocking power). Similarly, state dissolution statutes may allow a minority owner to petition a court to dissolve the company under certain circumstances. These rights mitigate the typical disadvantages of holding a non-controlling interest. In business valuation, the degree of control is a critical factor, and its absence is quantified by the Discount for Lack of Control (DLOC). Therefore, the presence of these rights directly influences and typically reduces the magnitude of the applicable DLOC.

A. Swing vote: This is a specific situation where a minority block can decide an outcome by siding with one of two larger, opposing factions, which is not the primary effect of these provisions.

B. Blocking power: While these factors create blocking power, blocking power is an attribute of control that is considered when quantifying the lack of control discount. The discount itself is the ultimate valuation concept being influenced.

D. Ultimate rate of return produced by the interest: This is a result derived from the value of the interest. The provisions directly influence the control characteristics and value, which in turn affects the potential rate of return.

1. Pratt, S. P., & Grabowski, R. J. (2008). Valuing a Business: The Analysis and Appraisal of Closely Held Companies (5th ed.). McGraw-Hill. In Chapter 15, "Discounts for Lack of Control and Minority Interests," the authors discuss factors that influence the magnitude of the DLOC, including "contractual or statutory restrictions," which encompass supermajority provisions and shareholder rights under state law (pp. 398-400).

2. Hitchner, J. R. (2017). Financial Valuation: Applications and Models (4th ed.). John Wiley & Sons, Inc. Chapter 10, "Valuation Discounts and Premiums," explains that the degree of control is not absolute. It details how specific provisions in shareholder agreements or state statutes can grant minority shareholders certain prerogatives, such as blocking power, which must be considered when selecting a discount for lack of control.

3. Mercer, Z. C. (2004). Valuing Enterprise and Shareholder Cash Flows: The Integrated Theory of Business Valuation. Mercer Capital. The text emphasizes that value is driven by expected cash flow and risk. Factors like supermajority requirements and dissolution rights affect a shareholder's ability to influence cash flows or force a liquidity event, thereby directly impacting the risk and value associated with a lack of control, which is reflected in the DLOC.