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DUAL CLASS SHARES: ARE THERE RETURNS DIFFERENCES?
Author(s) -
Foerster Stephen R.,
Porter David C.
Publication year - 1993
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1993.tb00300.x
Subject(s) - voting , dividend , economics , ask price , econometrics , financial economics , class (philosophy) , value (mathematics) , mathematics , statistics , finance , political science , computer science , artificial intelligence , politics , law
We examine dual classes of shares with identical dividends and liquidation treatment, but with different voting rights. We extend previous dud class studies by examining bid‐ask adjusted prices and by examining returns after controlling for bid‐ask spread and market value differences between voting classes. We establish that voting right differences, although related to price differences between superior and restricted voting shares, do not impact on average returns behavior. These findings are consistent with previously forwarded voting premium hypotheses.