Summary
This paper examines the estimation of beta factors of dominated firms over different stages of concentrated control, from factual and contractual concern-relationships up to Squeeze-Outs. In our empirical analysis we show a market risk uncoupling effect for firms, which are subject to control by a large shareholder, as evidenced by significantly decreasing beta factors over different stages of control. Firms subject to a profit transfer and domination agreement and Squeeze-Out candidates have beta factors close to zero, and thus belong to a lower risk class than firms with dispersed ownership. These low beta factors can be economically explained by the influence of a controlling shareholder and can be estimated easily, such that they shall be used for the computation of discount factors. Based on our results we suggest preferring the application of thin-trading correction procedures over the use of peer-group betas.