On the price of different classes of shares
Neither the opponents nor the supporters of the efficiency proposition investigate whether stock prices may rationally reflect further elements in addition to future dividends. The experience of several countries, however, shows that market prices of different types of shares may diverge, and someti...
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2013-11-01
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| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11113 |
| _version_ | 1828042596426973184 |
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| author | O. CASTELLINO |
| author_facet | O. CASTELLINO |
| author_sort | O. CASTELLINO |
| collection | DOAJ |
| description | Neither the opponents nor the supporters of the efficiency proposition investigate whether stock prices may rationally reflect further elements in addition to future dividends. The experience of several countries, however, shows that market prices of different types of shares may diverge, and sometimes considerably so. Indeed, economic theory does not seem to have devoted sufficient attention to the magnitude and determinants of different valuations. The present paper analyses this issue in two steps. First, a stable situation is considered, where the distribution of shares between “majority” and “minority” shareholders is fixed. Second, and unstable situation where the possibility of changes in the distribution of shares is explicitly considered. In both cases, two classes of shares are considered, one with full voting rights and another with no voting rights at all.
JEL: G10, G14
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| first_indexed | 2024-04-10T17:31:47Z |
| format | Article |
| id | doaj.art-cacc71eefc4e453582bbcb9d7db0afad |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:31:47Z |
| publishDate | 2013-11-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-cacc71eefc4e453582bbcb9d7db0afad2023-02-03T16:45:25ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432013-11-014216810.13133/2037-3643/11113On the price of different classes of sharesO. CASTELLINONeither the opponents nor the supporters of the efficiency proposition investigate whether stock prices may rationally reflect further elements in addition to future dividends. The experience of several countries, however, shows that market prices of different types of shares may diverge, and sometimes considerably so. Indeed, economic theory does not seem to have devoted sufficient attention to the magnitude and determinants of different valuations. The present paper analyses this issue in two steps. First, a stable situation is considered, where the distribution of shares between “majority” and “minority” shareholders is fixed. Second, and unstable situation where the possibility of changes in the distribution of shares is explicitly considered. In both cases, two classes of shares are considered, one with full voting rights and another with no voting rights at all. JEL: G10, G14 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11113Efficiency propositionstock pricesdividendsshare price divergence |
| spellingShingle | O. CASTELLINO On the price of different classes of shares PSL Quarterly Review Efficiency proposition stock prices dividends share price divergence |
| title | On the price of different classes of shares |
| title_full | On the price of different classes of shares |
| title_fullStr | On the price of different classes of shares |
| title_full_unstemmed | On the price of different classes of shares |
| title_short | On the price of different classes of shares |
| title_sort | on the price of different classes of shares |
| topic | Efficiency proposition stock prices dividends share price divergence |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11113 |
| work_keys_str_mv | AT ocastellino onthepriceofdifferentclassesofshares |