Value of C company = Value of A company + Value of B company
It seems so simple; however it is not the way how valuation actually happens in the real life scenarios. That’s where the role of a valuer becomes significantly important. A corporate valuer always focus on the risk involved while undertaking any SOTP valuation and gives appropriate discounts accordingly. In the transaction history and the empirical research carried by various researchers it being well laid that the market gives discount to the sum of parts value which is known as Diversification discount or portfolio discount or conglomerate discount.