Similarly Traded Securities: Greek Common vs. Preferred Stock

Posted: 20 Aug 2000

See all articles by Nikolaos T. Milonas

Nikolaos T. Milonas

National and Kapodistrian University of Athens - Faculty of Economics; Cardiff University Business School

Abstract

This paper examines the price spread between voting (common) and non-voting (preferred) stocks during the period 1990-1995 for a sample of 55 Greek companies. Because in Greece preferred stocks are not essentially different from common stocks, a number of hypotheses were tested to explain the observed differences. The data reveal an average spread of 27.5% for the entire period which, however, varies across years considerably. In cross-sectional regressions it was found that the volatility of common stock returns, the liquidity of common shares relative to preferred shares, the ownership concentration, and the minimum dividend yield guaranteed to preferred stockholders explain a significant portion of the spread.

Keywords: Voting right, price spread, ownership concentration, volatility, liquidity

JEL Classification: G14

Suggested Citation

Milonas, Nikolaos T., Similarly Traded Securities: Greek Common vs. Preferred Stock. Available at SSRN: https://ssrn.com/abstract=239683

Nikolaos T. Milonas (Contact Author)

National and Kapodistrian University of Athens - Faculty of Economics ( email )

8 Pesmazoglou street
GR-10559 Athens
Greece

Cardiff University Business School

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

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