Betzer, André, van den Bongard, Inga and Goergen, Marc ![]() |
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Abstract
A change in the index selection rules of Deutsche Börse provides a unique opportunity to investigate the drivers behind the decision to abolish dual-class shares. As of June 2002, selection is based on the market capitalization of the free-float of the more liquid share class rather than the overall market capitalization. Hence, firms have had to reassess the benefits from their dual-class shares by weighing them against the cost from foregone index weight associated with having two share classes. Our findings suggest that index membership significantly affects the controlling shareholder’s motivation to unify preferred and common stock.
Item Type: | Article |
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Date Type: | Publication |
Status: | Published |
Schools: | Business (Including Economics) |
Subjects: | H Social Sciences > HG Finance |
Uncontrolled Keywords: | Private benefits of control; Dual-class stock; Ownership structure; Corporate governance |
Publisher: | Elsevier |
ISSN: | 1042-4431 |
Date of First Compliant Deposit: | 5 April 2017 |
Date of Acceptance: | 26 March 2017 |
Last Modified: | 04 Dec 2024 11:00 |
URI: | https://orca.cardiff.ac.uk/id/eprint/99660 |
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