The Value of Voting Rights to Majority Shareholders: Evidence from Dual Class Stock Unifications
We study transactions of voting rights. In our sample of 67 dual class unifications superior vote shareholders give up their superior voting status (all firm stocks become â€œone share one voteâ€ ), and receive (in most cases) compensation in the form of additional stocks. Based on the compensation granted, the median price of 1% of the vote is about 0.1% of firmâ€™s equity. More interestingly, the price of vote decreases with institutional holdings, and increases with the percentage vote lost by the majority shareholders. The position and interests of the majority holders appear as the main determinants of the price of vote.
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- Levy, Haim, 1983. " Economic Evaluation of Voting Power of Common Stock," Journal of Finance, American Finance Association, vol. 38(1), pages 79-93, March.
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- Luigi Zingales, 1995. "What Determines the Value of Corporate Votes?," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1047-1073.
- Lease, Ronald C. & McConnell, John J. & Mikkelson, Wayne H., 1983. "The market value of control in publicly-traded corporations," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 439-471, April.
- Horner, Melchior R., 1988. "The value of the corporate voting right : Evidence from Switzerland," Journal of Banking & Finance, Elsevier, vol. 12(1), pages 69-83, March.
- Bergstrom, Clas & Rydqvist, Kristian, 1990. "Ownership of equity in dual-class firms," Journal of Banking & Finance, Elsevier, vol. 14(2-3), pages 255-269, August.
- Smith, Brian F. & Amoako-Adu, Ben, 1995. "Relative Prices of Dual Class Shares," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 30(02), pages 223-239, June.
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