Similarly Traded Securities: Greek Common vs. Preferred Stock
Posted: 20 Aug 2000
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
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